Clinton Cash (14 page)

Laureate Education began as part of Sylvan Learning Systems but branched out to become one of the largest for-profit university systems in the world. Founded in Baltimore in 1999, it now comprises a sprawling network of campuses, including six in Saudi Arabia, a dozen in Brazil, three in China, and even one in Cyprus.
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In Brazil alone, there are 130,000 students paying tuition to attend ten Laureate International schools on forty different campuses.
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Laureate recruits students through telemarketing. The call centers are often on the campus themselves and those making the calls are university students.
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The university system spends more than $200 million a year on advertising, including television commercials, online campaigns, and billboards that dot the developing world.

In early 2010 Bill signed on as “honorary chancellor” of Laureate. The title might have been “honorary,” but Bill got paid for his services. How much? It’s hard to know. Government disclosure forms did not require him to specify, only that it was “more than $1,000.” But part of his job included speaking at half a dozen or so Laureate schools every year, which, based on his typical fee scale, meant perhaps $1 million per year.

Bill sparked tremendous excitement when he showed up in 2012 to address throngs of students and faculty at Laureate schools in Tegucigalpa, Honduras, and Mexico City. He also visited campuses in Germany, Spain, Turkey, Malaysia, Brazil, Peru, and the United States.
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Bill’s face and name have been plastered on Laureate marketing materials and pictures of him have lined the walkways at campuses like Laureate’s Bilgi University in Istanbul, Turkey.
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The relationship between Laureate chairman Douglas Becker and the Clintons formed in the years before Hillary became secretary of state, when Becker started showing up at Clinton Global Initiative (CGI) events. In 2008 Laureate became a partner with CGI. By 2009 Becker was paying Bill to give speeches at Laureate campuses in Spain, Brazil, and Peru.
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Other Clinton friends were soon brought in. Henry Cisneros, who served as secretary of housing and urban development during Clinton’s presidency, became chairman of Laureate’s National Hispanic University advisory board. Cisneros delivered commencement addresses in San Jose, California, where he praised Laureate as a “pioneer in higher education for Hispanics.”
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But Laureate’s business practices have faced serious legal scrutiny and criminal investigations in some countries. In Mexico, Chile, and Turkey, where Laureate operates, for-profit universities are actually illegal. Laureate has put money into a struggling nonprofit school, getting positions on the board, then getting
the school to hire Laureate for a variety of “services,” including computer-advisory services and English courses. Laureate has also received funds for the use of its trademark.

According to Chile’s economic crimes unit, Laureate’s Chilean schools transferred more than $80 million out of the country between 2011 and 2013. A national commission found that there were irregularities regarding Laureate’s activities.
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In its financial filings with the US Securities and Exchange Commission (SEC), Laureate admitted that the service agreements are a way to “efficiently transfer funds out of the universities in these countries.”
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Becker, in addition to running Laureate, is also the chairman of the International Youth Foundation (IYF). This nonprofit sister organization (whose offices are less than a mile from Laureate’s in Baltimore) runs numerous programs through Laureate, including something called YouthActionNet, which has fellows on Laureate’s campuses in Brazil, Mexico, Spain, Peru, Chile, and Turkey.
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Becker’s company announced its YouthActionNet commitment at the CGI annual meeting in 2010. Bill heartily approved: “I am pleased that Laureate International Universities and the International Youth Foundation have partnered on this commitment to empower young social entrepreneurs to take on pressing challenges in their own communities and around the world.”
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Shortly after Bill became honorary chancellor in April 2010, Hillary made Laureate part of her State Department Global Partnership. In October 2010 the State Department held a gala reception on the twentieth anniversary of IYF’s founding. The featured speaker was Maria Otero, the undersecretary of state for democracy and global affairs, who praised the group for “doing such important work.”
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IYF had already received financial support from USAID before Hillary became secretary of state, going back to 2001.
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But the amount of its grants has exploded since Bill became chancellor of Laureate. According to IYF tax filings, in 2010 government grants accounted for $23 million of its revenue, compared to $5.4 million from other sources. It received $21 million in 2011 and $23 million in 2012.
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In June 2011 IYF joined with the State Department and USAID in holding a Youth Partnerships Employability Conference in Washington.
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During Hillary’s tenure at State, IYF received USAID grants to work in Mexico, Mozambique, Senegal, Tanzania, the Kyrgyz Republic, Uganda, Jordan, the Caribbean, the West Bank and Gaza, and Algeria, and to address “good governance” issues worldwide. In 2012 it also received its first grant directly from the State Department: $1.9 million for work on a Middle East Partnership Initiative.

In January 2013, just before Hillary left her post as secretary of state, the International Finance Corporation (IFC) made a $150 million equity investment in Laureate, the first time the development organization had ever done so. IFC is part of the World Bank. The head of the World Bank at the time was Jim Kim, a Clinton friend and cofounder of Partners in Health, a partner of the Clinton Foundation.

Isn’t it troubling that while Bill Clinton was being paid by a private corporation, that corporation was also benefiting from State Department actions? Isn’t it troubling that an affiliate of that corporation is also receiving tens of millions in taxpayer money? Isn’t it troubling that this seeming conflict of interest was not disclosed?

Troubling State Department conflict of interest questions hardly end here. But now let us turn the camera to the man behind the podium (and Foggy Bottom).

CHAPTER 7

Podium Economics

W
HAT
W
AS
B
ILL
B
EING
P
AID
F
OR
?

M
ost ex-presidents see the demand for their speechmaking decline as they move farther away from their time in office. The opposite applies to Bill. Indeed, during Hillary’s tenure as secretary of state, Bill’s speechmaking activity increased and became much more profitable, particularly overseas. In a number of cases, these speeches were paid for by people with an interest in obtaining favors from Hillary.

Does Bill’s outsized personality and global popularity really explain his record financial success on the speaking circuit? We have become used to former occupants of the Oval Office making money in their post-presidential years. Ronald Reagan famously gave two speeches for $2 million in Tokyo following his retirement from office. George H. W. Bush gave lectures and joined corporate boards for firms like the investment giant the Carlyle Group. But no one comes close to Bill Clinton.

The really troubling thing about Bill’s speeches is the apparent correlation between his fees and Hillary’s decisions during her tenure as secretary of state. The timing of the payments, the much higher than average size of some of them, and the subsequent actions taken by Hillary raise serious questions about just what those who underwrote these exorbitant fees were actually paying for.

As noted earlier, Hillary infamously claimed she and Bill were “dead broke” when they left the White House. So while Hillary went to the US Senate, Bill hit the lecture circuit. In 2001 he gave thirty-nine speeches overseas and twenty in the United States. In the following seven years, the Clintons pulled in a stunning $109 million.
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As Clinton’s presidency receded into the past, his income from speeches, especially big paydays from overseas speeches, declined. But when Hillary became secretary of state in 2009, those high-paying overseas speeches ramped up dramatically. Bill’s three best years securing speaking fees over $250,000 occurred while Hillary was at State. In fact, of the thirteen Clinton speeches that fetched $500,000 or more, only two occurred during the years his wife was not secretary of state.

TD Bank, a Canadian financial institution, has paid Bill more than any other financial institution for lectures. More than Goldman Sachs, UBS, JPMorgan, or anyone on Wall Street. TD Bank paid Bill $1.8 million for ten speeches over a roughly two-and-half-year period from late 2008 to mid-2011. Moreover, these payments came at a crucial time, as Hillary wrestled with a controversial decision of enormous financial interest to the bank.

Beginning in 2008 TransCanada Corporation sought US government approval for the $8 billion, 1,660-mile-long Keystone XL pipeline, which was designed to transport 900,000 barrels
a day from Alberta’s oil sands to Gulf Coast refineries in Port Arthur, Texas.
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Because the project crossed an international border, authority for granting a presidential permit of approval rested with the US secretary of state.
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TD Bank had never paid Bill for a speech until the pipeline project began snaking its way through Washington. It was late 2008 and Keystone XL permits had just been submitted to Washington. Hillary had lost the Democratic nod for the White House, but she was still a powerful US senator. Capitol Hill Republicans were generally supportive of energy projects like Keystone XL. If there was going to be opposition, it would likely come from liberal Democrats.

One of the Keystone XL pipeline’s biggest shareholders was none other than TD Bank, which held $1.6 billion in shares. TD Bank was also on the hook for $993 million it had loaned to TransCanada.
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TD Bank, in a research note, called the pipeline a “national priority” that was essential for the long-term health of the Canadian oil industry.
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There had been talk since June 2008 that Barack Obama, having sewn up the Democratic nomination, would pick Hillary as his secretary of state. On November 21, 2008, the
New York Times
reported that Hillary would indeed be his nominee to head up the State Department.
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Four days later, on November 25 and 26, Bill was in Canada delivering his first of three speeches, for which TD Bank paid him $525,000.
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But the Clintons were only getting started. Hillary was confirmed as secretary of state on February 21, 2009. In May Bill returned to Canada and gave three more speeches for another $525,000, making appearances in Halifax, St. John, and Toronto. Four months later, on September 13, TD Bank sponsored yet another appearance, this one for $175,000 in Toronto. On November 3, 2009, TD Bank paid him another $175,000 for a speech in Abu Dhabi.
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On May 20, 2010,
Bill spoke for another $175,000 in a speech underwritten by TD Bank, this time in Calgary.
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Many of these TD-sponsored events were “private affairs,” not open to the public or the press.
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At several of the speeches, Clinton was introduced or interviewed by TD Bank vice chairman Frank McKenna. A former Canadian politician and former ambassador to the United States, McKenna is described in the Canadian press as “a good friend of both Bill and Hillary Clinton.”
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His interest in the Keystone XL pipeline went beyond his role as an executive with TD Bank. McKenna also sits on the corporate board of Canadian Natural Resources Ltd. (CNRL), a heavy-oil producer that planned to use the pipeline to move its oil to the United States.
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When the pipeline project ran into rough opposition in Washington, McKenna became a vocal advocate. When President Obama decided to delay review of the project until after the 2012 elections, McKenna questioned whether Canadians were being “screwed” by the decision.
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Given Hillary’s role in green-lighting the project, she naturally became the focus of intense lobbying efforts. In addition to suddenly throwing almost $2 million at Bill, Canadian corporations with an interest in the project hired several senior aides from Hillary’s presidential campaign to assist them in their efforts.

The lead lobbyist for TransCanada was Paul Elliott, who had served as the deputy national campaign director on Hillary’s 2008 presidential campaign. E-mail correspondence released through the FOIA reveals that US State Department officials advised TransCanada on how to build support for the Keystone Pipeline—even as the department was conducting its review on whether or not to approve it.
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One of those communicating with Elliott was Nora Toiv, a special assistant to Hillary Clinton.