Clinton Cash (12 page)

The Clinton Foundation has added corporate executives or business investors to its board of trustees from time to time, especially if they are major contributors. One can only wonder how tight the screening process is, given that at least four Clinton Foundation trustees have either been charged or convicted of financial crimes including bribery and fraud.

Vinod Gupta, the founder and chairman of the database firm InfoUSA, was a major Clinton financial supporter who served as a foundation trustee. In 2008 he was charged with fraud by the Securities and Exchange Commission (SEC) for using company funds to support his luxurious lifestyle. He was alleged to have used more than $9.5 million in corporate funds to pay for personal jet travel, millions for his yacht, personal credit card expenses, and the cost of twenty cars. He settled with the SEC for $4 million.
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Company shareholders also filed suit against him for misuse of corporate funds, including paying Bill a $3 million consulting fee, and using corporate assets to fly the Clintons around. Gupta defended his relationship with the Clintons, saying that those payments and his relationship with the Clintons earned huge dividends for Infogroup. The company settled with shareholders to the tune of $13 million.
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Sant Chatwal, whom we met in the previous chapter, was another foundation trustee who has been in legal trouble over the years, including his conviction for illegal campaign financing, obstruction of justice, and other charges.
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Victor Dahdaleh, another trustee, was charged by the Serious Fraud Office (SFO) in Great Britain with paying more than 35 million pounds in bribes to executives in Bahrain to win contracts of more than 2 billion pounds. He has worked for the American aluminum company Alcoa as a “super-agent.”
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(The billionaire had his bail revoked in the case because he contacted prosecution witnesses.)
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Dahdaleh was found not guilty after the SFO offered no evidence against Dahdaleh because a key witness, Bruce Hall, pleaded guilty to conspiracy to corrupt but refused to testify.
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Alcoa ended up pleading guilty in the US case arising out of the transaction and settled with the US Justice Department for $384 million. Dahdaleh was not charged in the United States individually.
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Current Clinton Foundation board member and trustee Rolando Gonzalez Bunster has been named in a fraud case in the Dominican Republic involving his company InterEnergy. The charges were filed by the Dominican government’s Anti-Corruption Alliance (ADOCCO).
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In 2013 Bunster was charged along with officials of a government agency concerning alleged “ballooned” fees charged to the government. The company dismisses the charges as “baseless allegations.”
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The flow of funds into the Clinton Foundation comes from a variety of sources. While the foundation boasts that it has hundreds of thousands of contributors, it relies heavily on a group of high-dollar donors to fund its operations. Since it reports contributions in ranges, not exact amounts, it is difficult to know precisely how dependent it is on those donors. But approximately 75 percent of its money has come from contributions of $1 million
or more. And as we will see, many of these contributions came from foreign nationals who decided to give large gifts or make large pledges at times when they had business before the US government.

As we have seen, the Clinton Foundation failed to report multimillion-dollar contributions from foreign entities like Ian Telfer’s Fernwood Foundation. Another Canadian mining investor whose contributions were never disclosed by the Clinton Foundation is Stephen Dattels. This mines-to-metals tycoon has donated millions of shares of stock to the foundation.

On June 8, 2009, Dattels donated two million shares of stock in his company Polo Resources—worth about $40,000 at the time. Eight weeks later, on July 29, according to WikiLeaks, the US ambassador in Bangladesh urged the prime minister and energy minister to reauthorize the Phulbari Mines for the use of “open pit” coal mining. Dattels’s Polo Resources is an investor in the mine.
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By donating shares in small mining companies, Dattels is creating a powerful incentive for the Clintons to help his companies succeed. If the stock price rises, the value of the foundation’s shares will rise. In the case of Dattels, this potentially creates a significant conflict of interest for Hillary Clinton.

This was not the first contribution Dattels made to the Clinton Foundation. Back in 2007 he had committed extensive financial support to CGSGI over a five-year period. He committed to do the same in 2012. The Dattels Family Foundation’s private website mentions the Clinton Foundation as a recipient of its support. But the name Dattels appears nowhere on Clinton donor disclosures nor does that of his company, Polo Resources. Again, the Clinton Foundation has failed to report a foreign contribution. How many more undisclosed foreign donors might there be? It is impossible to know. But this was a basic and simple
requirement that demands further investigation. And we will meet more undisclosed donors later in this book.

The flow of funds into the Clinton Foundation, which was supposed to be transparent, is far from it. As we saw in the previous chapter, even when contributions are disclosed, as in the case of an obscure Indian politician, he was apparently not really the source of those funds. Is this happening on other occasions?

Perhaps the most important function of the foundation is to bolster Bill and Hillary’s reputations as global humanitarians by bringing relief and care to people all over the world. This reputation not only flatters the ex-president’s ego and benefits Hillary’s political career, but it also has real value both in terms of global influence and financial reward. But how much good has the Clinton Foundation actually done?

At the Hollywood Bowl event, the publicity material included some sweeping claims about the Clinton Foundation’s accomplishments. “Over the past ten years,” it reads, “President Clinton’s vision and leadership have resulted in nearly 4 million people benefiting from lifesaving HIV/AIDS treatments.”
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This is perhaps the most popular and oft-repeated success of the foundation, and it stems from Bill’s efforts to negotiate and help create an international system whereby the cost of treatment drugs for HIV/AIDS victims would be radically reduced. “We set out to organize a drug market to shift it from a high-margin, low-volume, uncertain payment process . . . we were able to lower the price to just under $140 a person a year.”
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The claim is repeated when he is introduced for speeches around the country and when he is interviewed in the media. But what exactly does “we were able to lower” mean?

The Clinton Foundation did sign some compacts, but prices were already dropping quickly because generic versions of treatment drugs were coming on the market.
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According to public
health experts, the foundation piggybacked on the efforts of other organizations. “He may take a little more credit than is due,” admits Princeton Lyman, who served in the State Department under Hillary and dealt with issues related to HIV/AIDS in Africa.
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Here’s how the Center for Global Development explains how HIV/AIDS drugs prices were lowered: “Essentially, policy entrepreneurs like Peter Piot of UNAIDS—along with activists based within organizations as Doctors without Borders, Partners in Health
and later the Clinton Foundation
[emphasis added]—brought together the pharmaceutical manufacturers with developing world governments by negotiating the lower prices.”
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Another claim often advanced by Bill himself is that the Clinton Foundation is on the frontlines of the HIV/AIDS crisis in the developing world. As Magaziner puts it, “The Clinton Foundation is now involved in treating over two-thirds of the world’s children who are on treatment for AIDS.”
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But what exactly does “involved” mean?

You might get the impression, if you look at the impressive photo displays on the Clinton Foundation website, that they are actually administering drugs to sick people. But the foundation doesn’t actually get involved in directly treating people. While organizations such as Doctors Without Borders, the Red Cross, or Samaritan’s Purse establish their own health care infrastructures—Doctors Without Borders had more than 300,000 HIV patients directly under their care in 2012—the Clinton Foundation effectively has none.
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Instead it serves as a middleman. “They’ve gone around in a very deliberate process of finding what they call ‘care partners,’” says Jim Yong Kim, who cofounded Partners in Health, which works with the Clinton Foundation. “That’s what Partners in Health is—our specialty has been working in rural areas.”
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The world needs its middlemen, of course. But what this really means is that in practice, the foundation’s work is heavily geared toward managing relief agency funds provided by foreign governments, such as Ireland, and dealing with health ministry bureaucrats in the developing world. In the relief world the Clinton Foundation works like a management consulting firm, such as McKinsey. But unlike McKinsey or another management firm, specific metrics on specific work by the foundation itself is hard to come by.

Clinton’s motivation for taking on AIDS as a philanthropic cause has raised serious debate. Many who have been working in the field say he did a lousy job as president regarding the AIDS issue, largely ignoring it. As Greg Behrman, the author of a definitive book on the global AIDS crisis put it to the
New York Times
, “As president, though, the record is clear. Clinton was not a leader on global AIDS and the consequences have been devastating.”
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Andrew Jack of the
Financial Times
, who traveled with Clinton to see his work on AIDS, asks whether, in light of his poor record as president, he is seeking some kind of “atonement.”
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According to Bill, his interest in working on AIDS issues stems primarily from a conversation he had with Nelson Mandela shortly after leaving the White House. Clinton says Mandela asked him to work on these issues to help Africa.

Does Clinton’s motivation matter? It does if his ultimate purpose is to make himself look good. If that is the case, he will focus on appearances rather than actual results. And making the Clintons look good is clearly central to the foundation’s purpose. Its website is replete with pictures of Bill, and increasingly of Hillary and Chelsea, on humanitarian missions in remote locales in Africa or Asia. The press office also churns out media releases announcing foundation news or the activities of the Clinton family.

The Clinton Foundation’s media machine focuses heavily on the family’s activities. One of its projects involved helping to pay for the refurbishment of a pediatric clinic in the African country of Lesotho. When Bill showed up in July 2006, he was greeted at the Maseru airport with a red carpet and a receiving line of government officials. For good measure, “cultural groups performed dances and songs,” according to US diplomatic cables. The king of Lesotho gave Bill a knighthood.

Following the “celebratory reception,” Bill headed to the pediatric clinic his foundation had helped equip where he was serenaded by “choirs and children.”
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Ignored in foundation releases and related press reports was the fact that months earlier, in December 2005, the Baylor College of Medicine and Bristol-Myers Squibb had opened a pediatric clinic in the same town. But there was no parade or celebration. “No one has star power like Clinton,” noted Dr. Mark Kline, president of the Baylor International Pediatric AIDS Initiative. “But the casual observer might be led to believe that no one else is doing anything, and that may draw resources away from others.”
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But beyond good publicity, the foundation serves other purposes as well. As we have already seen, Clinton’s visits to foreign locales frequently mix business with charitable work. When Bill flies into a country with an entourage, which may include businessmen with matters before the local government, he is there ostensibly to do (or simply talk about) his philanthropic work. But these visits often involve making useful introductions that coincide with major business deals in which Clinton Foundation donors are involved.

The Clinton Foundation also provides opportunities for foreign leaders and foreign investors to burnish their (sometimes shaky) reputations and images by association with its praiseworthy activities.

Dictators like Nursultan Nazarbayev in Kazakhstan, Meles Zenawi from Ethiopia (whom we will meet in chapter 7), and Paul Kagame of Rwanda might have terrible reputations when it comes to human rights, but they are invited guests at Clinton Foundation events where they are praised for their leadership. Kagame, for example, was a “Clinton Global Citizen of the Year” in 2009. He was praised by the foundation as a “brilliant military commander” and given the award for “leadership in public service.” What you won’t read in his bio is the fact that Kagame arrests his political opponents and censors journalists. Nor is there mention of the fact that the United Nations accuses Kagame’s militias of raping and slaying thousands of Hutu. It is widely believed that Kagame is largely responsible for fueling the civil war going on in the neighboring Democratic Republic of Congo.
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Whenever Kagame speaks before the Clinton Foundation or meets with Bill, he is quick to publicize it. He clearly recognizes that partnering with an ex-president grants him added legitimacy.
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