In Charity and Politics, Clinton Donors Overlap
Fred R. Conrad/The New York Times
The Clintons at the dedication of his library in late 2004.
By DON VAN NATTA Jr., JO BECKER and MIKE McINTIRE
Published: December 20, 2007
This article is by Don Van Natta Jr., Jo Becker and Mike McIntire.
Top, Evelyn Hockstein for The New York Times; middle, Jean-Philippe Defaut for The New York Times; bottom, Bill Cunningham/The New York Times
Frank Giustra, top, runs a group that gave $31 million to the Clinton Foundation; Sir Tom Hunter began donating $10 million a year in 2006; and Bernard L. Schwartz has pledged $1 million.
Over the last decade, former President Bill Clinton has raised more than $500 million for his foundation, allowing him to build a glass-and-steel presidential library in Little Rock, Ark., and burnish his image as an impresario of global philanthropy. The foundation has closely guarded the identities of its donors — including one who gave $31.3 million last year.
Now, the secrecy surrounding the William J. Clinton Foundation has become a campaign issue as Senator Hillary Rodham Clinton seeks the Democratic presidential nomination with her husband as a prime source of strategy and star power. Some of her rivals argue that donors could use presidential foundations to circumvent campaign finance laws intended to limit political influence.
Mr. Clinton himself echoed those concerns this fall when he pledged to make public future donors if Mrs. Clinton was elected president. While disclosure is not legally required, failure to do so, Mr. Clinton said, would raise “all these questions about whether people would try to win favor with her by giving money to me.”
Even so, past donors should remain private, he insisted, “unless there is some conflict of which I am aware, and there is not.”
But an examination of the foundation demonstrates how its fund-raising has at times fostered the potential for conflict.
The New York Times has compiled the first comprehensive list of 97 donors who gave or pledged a total of $69 million for the Clinton presidential library in the final years of the Clinton administration. The examination found that while some $1 million contributors were longtime Clinton friends, others were seeking policy changes from the administration. Two pledged $1 million each while they or their companies were under investigation by the Justice Department.
Other donations came from supporters who had been ensnared in campaign finance scandals surrounding Mr. Clinton’s 1996 re-election campaign.
In raising record sums for her campaign, Mrs. Clinton has tapped many of the foundation’s donors. At least two dozen have become “Hillraisers,” each bundling $100,000 or more for her presidential bid. The early library donors, combined with their families and political action committees, have contributed at least $784,000 to Mrs. Clinton’s Senate and presidential coffers.
The foundation and Mrs. Clinton’s political campaigns have been intertwined in other ways. Terry McAuliffe, who led the foundation’s fund-raising and sits on its board, is now Mrs. Clinton’s campaign chairman and chief fund-raiser. Cheryl Mills plays a similar dual role, sitting on the foundation board and serving as the general counsel to Mrs. Clinton’s campaign. And Jay Carson recently traded a communications position at the foundation for a job as her campaign’s press secretary.
As the scope of the foundation expanded from the Clinton library into issues like treating AIDS in the developing world and addressing global poverty and climate change, and Mrs. Clinton moved closer to announcing her candidacy, the pace of giving quickened. Last year, contributions reached $135 million, a 70 percent increase over the previous year. Two-thirds came from just 11 donors.
The $31.3 million donation, which was previously undisclosed, came from the Radcliffe Foundation run by Frank Giustra, a Canadian who has made millions financing mining deals around the world. Mr. Giustra has become a member of Mr. Clinton’s inner circle, joining him on global trips and lending him the use of his private MD-87 jet.
For weeks, Clinton Foundation officials had suggested that the $31.3 million contribution listed on its tax return did not come from a single donor. They then said it came from a single source, but declined to identify it. Wednesday afternoon, a representative of Mr. Giustra contacted The Times and acknowledged the Radcliffe contribution.
This year, Mr. Giustra announced separate plans to give the Clinton Foundation $100 million, plus half of his future earnings from natural resource business ventures, for a joint project to spur economic growth in poor Latin American mining communities. Taken together, the contributions make Mr. Giustra one of the foundation’s largest benefactors, if not the single largest.
The Times’s findings are based on tax documents filed by the Clinton Foundation and by groups that contributed to it, interviews with donors and people with direct knowledge of the foundation’s activities, as well as federal government records and an analysis of campaign finance data.
In a statement, the foundation said, “Donors did not seek, nor did President Clinton give, favors from the federal government,” adding that most of the contributions came after Mr. Clinton left office. “President Clinton is grateful for the support the foundation has received from more than 100,000 donors,” which helped provide AIDS medication for 750,000 people, fight climate change, combat childhood obesity and build heath systems around the world, the statement said.
In a separate written response from Mrs. Clinton’s campaign, a spokesman, Phil Singer, said, “Senator Clinton is not involved in the fund-raising or operations of the Clinton Foundation.” Mr. Singer noted that President Clinton’s promise to disclose future donors should his wife become president went beyond what the law required.
To limit the influence of any single donor, federal election law prohibits foreign donations to presidential campaigns and limits Americans to $2,300 per election. But presidential foundations are free to accept unlimited and anonymous contributions, even from foreigners and foreign governments. Indeed, the Saudi royal family, the king of Morocco, a foundation linked to the United Arab Emirates, and the governments of Kuwait and Qatar have made contributions of unknown amounts to the Clinton Foundation.
“The vast scale of these secret fund-raising operations presents enormous opportunities for abuse,” said Representative Henry A. Waxman, Democrat of California, who introduced a bill to force disclosure of presidential foundation donors. The bill passed the House, 390-34, in March but stalled in the Senate.
Building a Foundation
In June 1999, as the Clinton administration wound down, Mrs. Clinton told friends gathered in the White House solarium that wealthy donors had offered to establish a foundation for her. But she was set on running for the Senate in New York. That same month, Mr. Clinton and his chief fund-raiser met for dinner with 40 executives at La Grenouille, a French restaurant in Manhattan. The president had a vision for a charitable foundation that would tackle problems domestic and foreign, several former aides who helped establish the foundation said.
But first, Mr. Clinton had to raise money for his presidential library, which would ultimately cost $165 million. He found a ready pool of library donors in people and companies with matters before the government, many of them loyal Democratic contributors.
On October 6, 1999, the charitable arm of the Anheuser-Busch Companies gave $200,000, the first of five payments over five years totaling $1 million, according to records filed by the company’s foundation. Less than a month earlier, the company, the country’s leading beer maker, had scored a major victory when the Clinton administration’s Federal Trade Commission dropped a bid to regulate beer, wine and liquor advertising that critics said was aimed at under-age drinkers.
Francine I. Katz, a company spokeswoman, said the donation was unrelated to any government action and that its foundation had contributed more than $360 million to a wide array of organizations, including the Bush, Truman and Johnson presidential libraries.
William A. Brandt Jr., a bankruptcy lawyer in Chicago and prolific Democratic fund-raiser, pledged $1 million in May 1999. At the time, the Justice Department was investigating Mr. Brandt’s testimony to Congress about a $10,000 per couple fund-raiser he had held for the president’s 1996 re-election campaign. At issue was whether he had lied when he denied promoting it as an explicit opportunity to lobby a top bankruptcy official at the event.
In August 1999, the Justice Department determined that “prosecution is not warranted.” Mr. Brandt, who is now a Hillraiser, did not respond to several phone and e-mail messages.
Bernard L. Schwartz, another major Democratic contributor who was then chief executive of Loral Space and Communications, gave $250,000 and pledged $750,000 more in 2000. At the time, investigators were trying to determine if Loral had improperly provided satellite technology to China. Under the Bush administration, Loral agreed to pay a civil fine of $14 million to settle the case. Mr. Schwartz, who is now also a Hillraiser, said that his donations were unconnected to Loral’s troubles and added that he had contributed to other presidential libraries.
Toward the end of the Clinton administration, Dr. Richard Machado Gonzalez and his lawyer, Miguel D. Lausell, both major Democratic donors in the 1996 presidential election, were pushing the president to increase Medicare reimbursements to hospitals in Puerto Rico, like the one owned by Dr. Machado. Mr. Lausell pledged $1 million to the library in 1999, eight months before Mr. Clinton proposed increasing Medicare payments to Puerto Rico for the second time in his administration. Dr. Machado gave the foundation $100,000 about six months later.
In the interim, the president appointed Mr. Lausell to the board of the Overseas Private Investment Corporation, which helps American companies with foreign projects.
Jeffrey Farrow, who coordinated issues involving Puerto Rico for the president, said the administration felt Medicare unfairly penalized Puerto Rico by paying a lower rate there than in the 50 states. Although Congress rejected the proposed increase, Mr. Farrow said “they didn’t have to contribute the way they did in order to get our attention.”
Both men are supporters of Mrs. Clinton, and Mr. Lausell serves as a senior adviser on Latino affairs. Dr. Machado did not return calls seeking comment, and efforts to reach Mr. Lausell through the campaign were not successful.
A fledgling telecommunications company, NextWave Wireless, was battling the Federal Communications Commission when library fund-raisers tapped its chief executive and a major investor. NextWave had promised to pay $4.74 billion for cellphone licenses, but when it declared bankruptcy before completing its payments, the F.C.C. threatened to put the licenses up for public auction, which would have ruined NextWave.
Over three consecutive days in December 1999, with a decision imminent, the library logged a $100,000 pledge from NextWave’s chief executive, Allen Salmasi, and a $100,000 contribution plus a $1 million pledge from Bay Harbour Management, a major investor in NextWave.
The agency ultimately repossessed NextWave’s licenses, prompting a court battle that the company won. Bay Harbour’s co-owner, Douglas Teitelbaum, who declined to comment, never fulfilled his promise to contribute the additional $1 million. Mr. Salmasi did not respond to an e-mail message or to calls to a company spokesman.
Mr. Clinton also found support for his library among some people who figured in the Democratic fund-raising controversies dating to the 1996 elections that involved White House sleepovers, coffees for big donors and money funneled from the Chinese government.
Among them was Farhad Azima, an Iranian-born aviation executive whose involvement in the Iran-contra scandal — one of his companies flew military equipment to Iran in the 1980s — prompted the Democratic National Committee to return a $143,000 donation in 1997. The party later accepted the money. Mr. Azima pledged $1 million to the library.
Another $1 million pledge came from Eric and Patricia Hotung. Mr. Hotung is a Hong Kong businessman who in 1997 was granted a meeting with Mr. Clinton’s national security adviser after Mr. Hotung’s wife, Patricia, an American, offered $100,000 to the Democrats.
Nine of the original library donors received presidential appointments to organizations like the President’s Committee on the Arts and Humanities and the United States Holocaust Memorial Council. In his final days in office, Mr. Clinton appointed two of the donors, the businessmen Mark S. Weiner and Vinod Gupta, to the board of the John F. Kennedy Center for the Performing Arts.
A Joint Effort
At a Democratic debate in September, when Mrs. Clinton was asked whether the foundation would disclose its donors, she indicated that the decision was not hers. “Well, you’ll have to ask them,” she replied, referring to the former president and his staff.
But Mrs. Clinton’s effort to distance herself understates the extent to which the foundation was a joint enterprise from the start.
Shortly after the Clintons left the White House, close advisers convened meetings at the couple’s Washington home to map out Mr. Clinton’s future as a philanthropist.
Mrs. Clinton played an important role in shaping both the foundation’s organization and the scope of its work, said Karen A. Tramontano, a senior adviser in the Clinton White House and the foundation’s first chief of staff.
Advisers also were acutely aware that the foundation’s operations — and any perception of a conflict — could harm Mrs. Clinton politically. “She and I would speak frequently,” Ms. Tramontano said. “She had a lot of ideas. All the papers that went to him went to her.”
Early on, donations to the library caused perception problems. The day after he left office, Mr. Clinton was embroiled in a scandal over his 11th-hour pardon of the financier Marc Rich, who fled the United States in 1983 to avoid tax evasion and other charges. A Congressional hearing later revealed that the pardon came after Mr. Rich’s former wife, Denise Rich, contributed $450,000 to Mr. Clinton’s library.
That spring, Mrs. Clinton co-sponsored legislation to publicly identify donors to foundations of future sitting presidents. She referred to that legislation in the debate three months ago, although the bill had died in committee.
Beyond the revelation of the Rich donation, the names of some other donors emerged after the library opened in November 2004, when a New York Sun reporter found a partial contributor list displayed on a public computer there. The list, with neither amounts nor dates, disclosed donations from the Saudi royal family and other foreign sources. After the Sun story, the computer plug was pulled.
As the foundation has evolved into global philanthropy, it has attracted more large donors. Among them are Tom Golisano, an iconoclastic billionaire from upstate New York, who gives the foundation $3 million to $5 million a year, according to Mr. Golisano’s confidants; Stephen Bing, a Hollywood producer and a Hillraiser, who contributed stock worth $10,028,614 in 2005; Sir Tom Hunter, a Scottish businessman who began donating $10 million a year in 2006 for economic development in Africa; and the Bill & Melinda Gates Foundation, which said it had given or pledged $23,145,677 since 2005, mostly to support AIDS work and an effort to reduce the costs of malaria drugs.
Throughout, Mrs. Clinton has offered “good, specific ideas” to the foundation when Mr. Clinton asks her to attend planning sessions, said Ira Magaziner, a top foundation executive and longtime Clinton adviser.
As the presidential campaign got under way, foundation officials began working to ensure that none of their enterprises would have political repercussions for Mrs. Clinton. Brian Byrd, who once worked for the Rockefeller Foundation and is now a lobbyist for arts groups, said that this year he interviewed for a job created to help review attendees to Mr. Clinton’s annual conference and make sure charitable pledges were met.
“Part of it was that Hillary was running for president, and they wanted to be sure everything was on the up and up — that was said to me,” said Mr. Byrd, who added that he decided he did not want and was not offered the position. “They wanted to get all their ducks in a row.”
Alain Delaquérière and Aron Pilhofer contributed reporting.