Clinton Cash (23 page)

Not surprisingly, the deal provoked outrage in the Haitian senate. The mining concession was a sweetheart deal. For one thing, the royalties to be paid to the Haitian government were only 2.5 percent, which mining experts noted at the time was “really low.” “Anything under five percent is just really ludicrous for a country like Haiti,” said mining royalties expert Claire Kumar. “You shouldn’t even consider it.”
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The episode resulted in a resolution by the Haitian parliament challenging the secrecy of the process and calling for a moratorium on new mining permits. The resolution passed the Haitian senate unanimously.
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VCS Mining is continuing to build on its mining concessions in Haiti.

M
eanwhile, connected businessmen continued to reap benefits from the reconstruction efforts.

For contracts to remove debris in Port-au-Prince, USAID went with Washington-based CHF International. As
Rolling Stone
put it, CHF became “one of the largest USAID contractors in Haiti and enjoys a cozy relationship with Washington.”
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It turns out that the company’s CEO, David Weiss, had been the deputy US trade representative for North American affairs during the Clinton administration. (He was also a 2008 Hillary for President campaign contributor.) In addition, the corporate secretary of the board of directors is Lauri Fitz-Pegado, who was a protégé of Clinton commerce secretary Ron Brown. Fitz-Pegado had served in a series of positions in the Clinton White House, including assistant secretary of commerce.

CHF received particular scorn from journalists on the ground
in Haiti. According to
Rolling Stone
, the firm operated out of “two spacious mansions in Port-au-Prince and maintains a fleet of brand-new vehicles, [and] is generally considered one of the most ostentatious” groups working out of Haiti.
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USAID contracts also went to consulting firms like New York–based Dalberg Global Development Advisors, which was also an active participant in and financial supporter of CGI. In spring 2010 Dalberg received a $1.5 million contract to identify relocation sites for Haitians displaced by the quake from their homes and communities.

USAID’s inspector general reviewed the firm’s recommendations and found them generally sloppy and unusable. As
Rolling Stone
reported, “One of the sites they said was habitable was actually a small mountain. . . . It had an open-sided pit on one side of it, a severe 100 foot cliff, and ravines. . . . It became clear that these people may not even have gotten out of their SUVs.”
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One early initiative pushed by both Bill and Hillary was to provide transitional housing for those left homeless by the earthquake. The plan was to give grants and funds to build approximately twenty thousand temporary shelters for $138 million. But nearly a year later, an April 19, 2011, audit by the USAID Office of the Inspector General (OIG) found that only 22 percent of the shelters had been built and that many of those were “substandard.”
⁵⁰

The results were no better when it came to providing new permanent homes.

In December 2010 Bill and Hillary approved a “new settlements program” that called for fifteen thousand homes to be built in and around Port-au-Prince. But by June 2013, more than two and a half years later, the GAO audit revealed that only nine hundred houses had been built. The goal was subsequently cut
to twenty-six hundred. At the same time, the cost of the project almost doubled, from $53 million to $90 million.

Even projects run through the Clinton Foundation and not the federal government achieved disastrous results.

When Bill decided that the United States needed to secure temporary housing for Haitian schoolchildren (a legitimate priority), Clayton Homes approached the Clinton Foundation and offered to help. The company was still in trouble with the Federal Emergency Management Agency for sending thousands of bad trailers to the US Gulf Coast after Hurricane Katrina. A class action brought against Clayton Homes and others was eventually settled.
⁵¹

In Haiti the Clinton Foundation paid $4 million of private money for what were called “hurricane proof trailers” that were “structurally unsafe,” and in some instances were found to have high levels of formaldehyde, with insulation coming out of the walls. The fumes, mold problems, and stifling heat made students sick. Many trailers ended up abandoned because they were poorly designed and ill suited to the Haitian climate.
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From Chappaqua, New York, Bill dreamed up the idea of a housing expo in Haiti that would bring architects and design firms from around the world to create sustainable homes using composite materials.
⁵³
The project was dubbed Building Back Better Communities (BBBC). Each builder erected a sample home for Haitians to live in. These buildings and designs were expected to be adopted for widespread use in the earthquake-ravaged country. But fourteen months later, “most of the model homes sat empty,” providing shelter for squatters and the occasional goat.
⁵⁴

“It was a waste of money with no respect for the builders,” Gabriel Rosenberg of GR Construction, a Haitian firm, said in
a telephone interview. “We invested about 25,000 dollars. We expected to sell those houses.”
⁵⁵

“It was the biggest joke I’ve ever seen,” complained John Sorge, with the firm Innovative Composites International (ICI). “It was a hoodwink to promote the government . . . the whole Expo was a farce.”
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B
y far the largest and most ambitious project for Hillary and Bill was their plan to build a clothing factory in northern Haiti. The area had been untouched by the earthquake, but they authorized the use of US taxpayer funds for rebuilding to create what would be called the Caracol Industrial Park.
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The Clintons had actually been pushing this project for some time. Cheryl Mills, Hillary’s right hand at State, was “credited with leading the effort for more than a year,” wrote the
Cleveland
Plain Dealer
.
⁵⁸
Originally a straightforward plan for economic development, the project gained new momentum as a means to both uplift the Haitian economy and house homeless workers. In the end, the complex project required hundreds of millions in US taxpayer money and special legislation passed through Congress granting tariff-free access to US markets.

Ostensibly designed for the benefit of the Haitian people, Caracol has shown mixed results. As we have already seen, the best intentions often go awry in a place like Haiti. One thing is clear, however: the most obvious beneficiaries of the deal were three family-owned companies with a long history of supporting the Clintons.

To start things off, a major clothing manufacturer had to be induced to build a factory. Sae-A, a South Korean textile company, was lured to Haiti with a State Department commitment
of $124 million for a power plant and basic infrastructure, as well as for employee housing. The Inter-American Development Bank promised another $100 million. The Haitian government gave Sae-A a fifteen-year break on taxes. Meanwhile, in the spring of 2010, Hillary, Bill, and Cheryl Mills pushed for and secured the passage of the Haiti Economic Lift Program (HELP), a law that would allow textiles to enter the United States from Haiti tariff-free.

Construction then began. However, before the omelet could be made, a few eggs had to be broken. Three hundred sixty-six farmers, relatively prosperous by Haitian standards, were evicted from their land to make way for the factory. The earthquake didn’t get them—but the factory did. “We watched, voiceless,” Jean-Louis Saint Thomas, an elderly farmer, said. “The government paid us to shut us up.”
⁵⁹

The construction contract for employee housing went to a Minnesota-based firm called Thor Construction. In addition to the contract rate, the firm received “danger pay” and “hardship pay,” increasing its take by over 50 percent. Thor Construction executives, including the CEO, are heavy contributors to Democrats.

The parameters of the job soon changed. The original estimate was that the worker houses would cost $8,000. But due to cost overruns, the price tag quickly jumped to $23,409. The original plan was to build twenty-five thousand homes. In the end, according to the GAO, little more than six thousand were constructed.
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In July 2012 Hillary and Bill showed up in Caracol for the factory’s grand opening, even as rubble still clogged the streets in the capital city of Port-au-Prince.
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The Clintons were joined by actors Sean Penn and Ben Stiller, billionaire businessman Richard Branson, and fashion icon Donna Karan to celebrate the
factory’s opening. Hillary touted it as a great day for Haiti. Bill teared up.

For his part, Bill Vastine, a member of the USAID Shelter Team that established the project’s original parameters, was aghast at the results. “If the American people saw the cost of this, they’d say ‘you’ve got to be out of your mind,’” he told a reporter in 2014.
⁶²

Perhaps those happiest were the US retailers—all of whom enjoy long-standing connections with the Clintons—who would benefit from selling the low-cost products coming out of Caracol.

These included GAP, whose chairman and CEO Robert Fischer sat on the Hillary for President finance committee. The Fischer family had been longtime Clinton financial supporters.

Another big beneficiary: Target Stores, which was founded and is still controlled by the Dayton family. The Daytons have also been longtime Clinton financial supporters.

Wal-Mart also received tariff-free clothing from the factory. Hillary had sat on the Wal-Mart board back when Bill was governor of Arkansas. While some Walton family members do not share the Clintons’ politics, several have written checks to a pro-Hillary superpac since the factory opened.

Regrettably, Caracol has failed to live up to its hype. The project’s sponsors claimed that it would create sixty thousand jobs. The actual number: about three thousand. The daily wage for workers is two hundred gourdes, which is roughly five dollars. For workers at the factory this is obviously better than nothing. But it is hard to believe such meager results were justified at such great expense.
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In sum, little of the money that has poured into Haiti since the 2010 earthquake has ended up helping Haitians. And how that money was spent was largely up to Hillary and Bill.

This fact has prompted two Haitian lawyers to petition Haiti’s Supreme Court of Auditors and Administrative Disputes to demand an audit of Bill Clinton’s tenure on IHRC. The lawyers, Newton Louis St-Juste and André Michel, have asked for information “to determine the relationship between the former Head of State William Jefferson Bill Clinton and the firms that benefited from contracts during and after his term as head of the IHRC.”
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In the meantime, the rubble-strewn streets of Port-au-Prince are still populated by those who saw their homes destroyed in 2010. These victims’ net worth hasn’t changed but that of the Clintons and their associates surely has.

CHAPTER 11

Quid pro Quo?

O
n December 9, 2009, the State Department beamed out a video message from Secretary of State Hillary Clinton. The occasion was “International Anti-Corruption Day.” Seated in front of the camera, she spoke about the important fight against political corruption around the world and praised the Organization for Economic Cooperation and Development’s (OECD) work combating bribery and graft. The OECD is an international body of the world’s largest economies. Hillary herself chaired the group in 2011, on its fiftieth anniversary. In the video, Hillary lauded OECD’s Anti-Bribery Convention as “a milestone in global efforts to encourage responsible and accountable governance.” She went on to declare that the United States “fully supports the OECD’s anti-corruption agenda.”
¹

Fighting corruption and bribery in the developing world was an important focus during Hillary’s tenure. As a State Department
spokesman explained, she “elevated corruption as a major focus of U.S. foreign policy. She also has promoted the importance of international anti-corruption agreements, including the OECD Anti-Bribery Convention.”
²

The OECD Working Group on Bribery specifically explains that “individuals and companies can also be prosecuted when third parties are involved in the bribe transaction, such as when someone other than the official who was bribed receives the illegal benefit, including a family member, business partner, or a favorite charity of the official.”
³

How does she reconcile her anti-corruption stance with the many transactions involving her and her husband that arguably present serious conflicts of interest, even in the best possible light? How can she maintain that her decisions were unaffected by the millions given to her husband and their family foundation, even if there were no explicit agreements? How does she not see herself as part of the problem?

Based on the OECD’s definition of bribery, there does not need to be an explicit quid pro quo. As the US Sixth Circuit Court noted in a 2009 corruption case, a quid pro quo does not require “a particular, identifiable act” when the funds were transferred. “Instead, it is sufficient if the public official understood that he or she was expected to exercise some influence on the payor’s behalf as opportunities arose.”
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Friends, money, and politics are a dangerous cocktail. The Clintons should know to avoid this kind of drinking while driving US policy.