Clinton Cash (16 page)

There were no clear guidelines about what was and what wasn’t permissible. After the speech in California, Bill Clinton’s office contacted the State Department and sought approval for a speech sponsored by the Shanghai Airport Authority (SAA). Note the flexibility and lack of understanding that it had already approved the speech in California when the State Department wrote back, “[Your correspondence] states that the Shanghai Airport Authority, a state-owned enterprise, would be a ‘title sponsor only.’ Does this mean that SAA is not contributing any funds to pay for President Clinton’s fees? I don’t believe we’ve previously cleared acceptance of fees from PRC-linked entities, but could consider this variation.”

The State Department Ethics Office was willing to “consider” a “variation” on guidelines, they wrote to Clinton’s office. Ultimately Clinton declined the speech. His office said there was a scheduling problem.

Bill also took a $550,000 payment for an appearance in Shanghai at something called the Huatuo CEO forum, underwritten by Chinese billionaire Yan Jiehe, a man described as “China’s baddest billionaire builder.” Yan has become wealthy in part through large government construction contracts. His company is perhaps most famous in China for lopping off and flattening seven hundred mountaintops for a construction project. (Yan says, in defense, the number wasn’t quite that high.)
⁵⁴
Yan, who calls Clinton a “close friend,” is an outspoken Chinese nationalist, explaining that foreign countries must “not look down on China. . . . I understand that my country, my nation, China is the greatest in history.”
⁵⁵

Prior to Hillary’s appointment as secretary of state, Bill had given only two speeches on the Chinese mainland, for a total of $450,000.

A
fter Hillary’s appointment, the Clintons promised both the incoming Obama White House and the US Senate that his speeches and business ties would be vetted by the State Department Ethics Office, as described in chapter 1.

This approach was doomed to fail, because the disclosures to be made were not required to indicate anything other than the name of the donor, certainly not investments or what business they might have with the State Department. An examination of the communication between Bill’s office and State Department ethics officers, which was obtained by Judicial Watch through
the Freedom of Information Act (FOIA), indicates that Bill Clinton’s office never provided anything but a cursory description of who was paying for each speech. TD Bank’s ties to the Keystone Pipeline, for example, were never disclosed. Ericsson, in the correspondence concerning that speech, is simply described as a “world-leading provider of telecommunications equipment.” No mention is made of its tangles with the State Department at the time. And the department green-lighted 215 speechmaking arrangements as not posing conflicts of interest.
⁵⁶

For the ethics officers replying to the Clinton requests, the emphasis was on a speedy response. And then there was the intimidation factor: they were vetting speeches being done by the spouse of their ultimate boss. And the spouse happened to be a former president. For good measure, all correspondence pertaining to Bill’s speeches between his office and the ethics office was copied to Cheryl Mills, Hillary’s chief of staff and Bill’s longtime friend.
⁵⁷
And who ran the ethics office at the time? That would be the State Department legal adviser, Harold Koh, who had previously been appointed by President Clinton as assistant secretary of state for democracy, human rights, and labor.
⁵⁸

Speaking of ethics problems, some of Bill’s largest paydays for speaking fees have come from scandal-plagued Nigeria. As we will learn in the next chapter, the Clinton financial ties to the continent of Africa run deep, and often include those with troubling reputations and rich histories of corruption.

CHAPTER 8

Warlord Economics

T
HE
C
LINTONS
D
O
A
FRICA

I
t was an unusually hot July in 2009 when Secretary of State Hillary Clinton landed in Kinshasa, the sprawling capital of the Democratic Republic of Congo (DRC). The DRC (previously named Zaire) had for decades been a house of horrors. Ruled by corrupt dictators, populated by child soldiers, plagued by tribal fighting, and suffering from invasions by neighboring countries, few places on earth are more hellish than the DRC.

As a senator, Hillary had taken the lead in rooting out DRC corruption and violence. In 2006 she was one of the first to sign on as a cosponsor of the Democratic Republic of the Congo Relief, Security, and Democracy Promotion Act of 2006—one of only twelve cosponsors in the Senate. The legislation—which was authored by then senator Barack Obama—included provisions on human rights, corruption, and sexual violence. It also addressed the issue of conflict minerals, the illicit trade in valuable minerals that fuel
much of the country’s violence. The bill had teeth, giving the US secretary of state real power and authority to combat the country’s problems. The bill was passed by the Senate and House, and President George W. Bush signed it into law.
¹

Hillary was also a vocal supporter of the Enough Project, an initiative launched by the liberal Center for American Progress. The project called for an international certification system that would require DRC mining companies and end users to account for their minerals’ origins. A similar program had been established several years earlier for the diamond trade. Soon after Hillary arrived in Kinshasa, former NBA star Dikembe Mutombo, who was from Congo, took her on a tour of a hospital built in honor of his late mother. Mutombo worked with both the Clinton Foundation and the Clinton Global Initiative (CGI) on projects in the region.
²

Hillary spoke with students about her commitment to helping Congo turn things around. “We know that the promise of the DRC is limitless,” she told them. “We will help you build a strong, civilian-led government that is accountable and transparent.” From Kinshasa she hopped aboard a UN plane (her US aircraft was too big) to visit President Joseph Kabila in the eastern city of Goma. There she talked about efforts to reduce the rapes and sexual violence that had terrorized the population. She talked about the lucrative mining trade in the country, too. “I am particularly concerned about the exploitation of natural resources, like the mining and the timber, where the resources do nothing to help the people of this country,” she said in front of the international media.
³

Her words were strong. But her actions during her tenure as secretary of state came nowhere near the positions she had taken while in the US Senate. As one scholar from Johns Hopkins University put it, the law she had cosponsored was “never implemented” by Secretary of State Clinton.
⁴
Furthermore, in
2011 the DRC government held national elections that were widely condemned. But the State Department showed little interest in trying to remedy them. When the Congolese government changed its constitution midelection in favor of President Kabila, the State Department called it an “internal affair.” When the United Nations Group of Experts linked Congolese militia groups to the neighboring government in Rwanda, it was proof of Rwanda’s military intervention into Congo that had contributed to hundreds of thousands of deaths. Some have asserted that Hillary’s State Department sought to block or delay the publication of the damning portion of the investigation and “quietly” asked Rwanda to stop its support for the rebellion.
⁵

What happened between 2006, when Hillary took those strong positions, and 2009, when she became secretary of state? Did she change her position? And if so, why? We can’t ultimately know why she carried out the policies that she did, but we can notice where changes in policies conformed with the interests of Clinton Foundation large donors.

O
n January 20, 2007, Hillary Clinton sat on a gold-colored sofa in her Washington, DC, home and announced via the Internet that she was forming an exploratory committee and filing with the Federal Election Commission (FEC) to seek the presidency. “I’m in,” Hillary declared. “And I’m in to win.”
⁶

Poll numbers gave her reason to be confident. With George W. Bush’s poll numbers in a free fall, there was a sinking feeling in Republican circles that the GOP would have a hard time keeping the White House. And among Democrats, Hillary was the early front-runner.

Pundits, pollsters, and the American public were not the only ones paying attention. Hillary’s announcement, in the weeks and
months to follow, sent a cascade of foreign dollars flowing into the Clinton Foundation and into the Clintons’ own pockets. Significant funds came from foreign investors with massive investments in troubled corners of the world. Securing access to African business opportunities had often required paying bribes to government officials. Now these investors were looking for access and political cover at the highest levels of power in Washington.

A few months after Hillary’s presidential announcement, on July 6, 2007, the Clinton Foundation announced that a reclusive Swedish mining investor named Lukas Lundin was committing $100 million through a charity called Lundin for Africa. According to the announcement, “the Lundin for Africa commitment will be aimed, in large part, at approved projects in Africa, where the Lundin Group has significant mining, oil, and gas interests.”
⁷
Lundin lived in Vancouver, Canada, and used a series of offshore trusts to manage his business affairs. A friend of Frank Giustra, Lundin was the head of a sprawling enterprise that cut deals with African warlords and dictators to gain access to valuable minerals and oil. As one longtime observer put it, the company “pursued a strategy of operating in countries under sanctions” and “building assets in countries such as Libya, Iran, and Sudan, where many other competitors were unable to operate.”
⁸

This kind of business could be enormously profitable if you were willing to look the other way on corruption and human rights. But the strategy also posed enormous risks. By 2007, when he made his commitment to the Clinton Foundation, his company was under considerable political and legal heat in the United States and Europe for some of its business dealings. The Lundin Group was one of only two Western oil companies drilling in the Sudan, which was not only the focus of media attention for massive human rights violations but was also on the US State Department’s list of terrorism-sponsoring nations. Human
rights activists were pushing for pension funds to divest stock in the company. Even more troubling, the Lundin Group was under investigation by the International Prosecution Chamber in Stockholm for complicity in “war crimes and crimes against humanity.” (In 2012, the chief prosecutor decided not to press charges.)
⁹
In announcing the donation to the Clinton Foundation, the family’s spokesman explained, “This is not to soothe a bad conscience but we want a positive impact in countries in Africa where mining is conducted.”
¹⁰

That may be true, but it does not explain why the Clinton Foundation saw fit to accept such a large contribution from such a questionable source.

The Lundin Companies were founded by Lukas’s father, Adolph, who had made a lot of cash mining in apartheid South Africa after the United Nations applied international sanctions. While other companies had fled the country in the face of international pressure, Lundin stayed. When Adolph died in 2006, Lukas continued where his father left off, working in the darker corners of Africa, where few companies ventured. The Africa Oil Corporation, in which they owned a controlling share, was active in Ethiopia’s Rift Valley, a region run by a corrupt dictatorial regime. Lundin also had a spin-off called Horn Petroleum that was drilling in Somalia even though the government there collapsed in 1990 and the country was essentially run by warlords.
¹¹
Lukas Lundin was also chairman of a company called NGEx Resources that was mining in Eritrea, a region that was attempting to break away from Ethiopia.
¹²
The company also had a heavy stake in gold mining operations in Mauritania and Ghana.
¹³

But perhaps the most lucrative mining operations in the Lundin portfolio were in the war-torn DRC, which has known more death, corruption, and fighting than perhaps any other area of Africa.

The Lundins got their foot in the door by striking a bargain with a Marxist warlord. In early 1997 the Congolese rebel leader Laurent Kabila, who had once worked with Che Guevara, was in the middle of a campaign to overthrow Mobutu Sese Seko, the country’s longtime strongman ruler. To finance his rebel campaign, he sent a representative to Canada to talk to mining companies about “investment opportunities.” His proposal was simple: give me money and I will give you lucrative mining rights in my country once I seize power. One of the first to bite was the Lundin family, which signed an agreement with the rebels and provided them with most of the funds they needed to march into the capital. The Lundins reportedly paid $50 million to Kabila’s “finance minister,” the first installment of $250 million they would give to the rebels. The rebels wanted cash and by all accounts didn’t know what they were doing. Kabila’s minister of mines, Kambale Mututulo, had never seen one. “He asked us to send him some books on how to run one,” noted one executive who met with him.
¹⁴