Hacked memo offers an angry glimpse inside ‘Bill Clinton Inc.’ – Politico
As a longtime Bill Clinton adviser came under fire several years ago for alleged conflicts of interest involving a private consulting firm and the Clinton Foundation, he mounted an audacious defense: Bill Clinton’s doing it, too.
The unusual and brash rejoinder from veteran Clinton aide and Teneo Consulting co-founder Doug Band is scattered across the thousands of hacked emails published by WikiLeaks, but a memo released Wednesday provides the most detailed look to date at the intertwined worlds of nonprofit, for-profit, official and political activities involving Clinton and many of his top aides.
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The memo at one point refers bluntly to the money-making part of Clinton’s life as “Bill Clinton Inc.” and notes that in at least one case a company — global education firm Laureate International Universities — began paying Clinton personally after first being a donor to the Clinton Foundation.
The 12-page document, prepared in November 2011 by Band with input from Clinton adviser John Podesta, came as Chelsea Clinton was pressing for changes to the foundation’s governance and complaining that Band, Teneo co-founder Declan Kelly and others were profiting from their ties to her father and the foundation.
In the memo, addressed to outside lawyers conducting a review of the foundation’s governance, Band insists that the relationship actually benefited the foundation financially, by bringing in new donors.
“Cognizant of the Foundation’s significant fundraising needs as well as my role as the primary fundraiser for the Foundation for the past 11 years, as a partner in Teneo, Mr. Kelley [sic] and I have asked and encouraged our clients to contribute to the Foundation,” Band wrote. “Through our efforts, we have brought new donors to the Foundation and garnered increased giving from existing donors.”
The most eye-catching examples in the memo are of companies that paid Bill Clinton directly at the same time they were donors to the foundation.
Band details donations from Laureate and another international education firm, GEMS Education, discussing them in the context of Clinton’s business relationships.
“Laureate is a Foundation relationship that evolved into a personal advisory services business relationship for President Clinton. … Laureate pays President Clinton $3.5 million annually to provide advice and serve as their Honorary Chairman,” Band wrote. “Gems approached President Clinton in 2009 to seek his personal services as an advisor to the company. … [Clinton aide Justin Cooper] and I convinced them to initiate a relationship to the Foundation, which they did; that relationship has grown into a business relationship for President Clinton and a donor relationship for CGI.”
“Neither Justin nor I are separately compensated for these activities (e.g. we do not receive a fee for, or percentage of, the more than $50 million in for-profit activity we have personally helped to secure for President Clinton to date or the $66 million in future contracts, should he choose to continue with those engagements),” Band wrote.
Band also says he was involved in soliciting and obtaining “as appropriate, in-kind services for the President and his family — for personal travel, hospitality, vacation and the like.”
Band’s examples appear designed to drive home the point that if his outside business activities and those of others who worked with the foundation were being labeled as potential or actual conflicts of interest, the same could be said of Clinton himself, who had his hands in the foundation’s work and also had personal business dealings with some of its donors.
“How then do we go through an exercise like this and wjc [William Jefferson Clinton] doesn’t as he is far more conflicted every single day in what he does? Why not apply the structure you set up for him to this situation?” Band wrote a few days earlier in a message to Cooper and longtime Clinton lawyer Cheryl Mills, also published by WikiLeaks.
“I signed a conflict of interest policy as a board member of cgi [the Clinton Global Initiative],” Band wrote in an email to Podesta, who had urged Band to tone down aspects of the larger memo. Band said he reported that “Teneo represents 4 cgi sponsors, 3 of which teneo brought to cgi. Oddly, wjc does not have to sign such a document even though he is personally paid by 3 cgi sponsors, gets many expensive gifts from them, some that are at home.”
Band’s longer memo suggests that some overlap in duties of Clinton’s aides is necessary given the multiple hats Clinton wears.
“We appreciate the unorthodox nature of our roles, and the goal of seeking ways to ensure we are implementing best practices to protect the 501(c)3 status of the Foundation,” Band wrote.
The memo’s footnotes also provide the most detailed response to a couple of key allegations against Band and Teneo that later emerged in the press: that a hotel suite arranged for the Clinton Global Initiative annual meeting was used to host the consulting firm’s clients and that some Teneo clients were given free passes to attend the conference.
“Teneo hosted 15 meetings in that room during the 4 days of CGI, primarily with the clients identified in this memo,” Band wrote. “I assumed CGI sent a bill for that room; when I recently learned we had not been billed, I directed that Teneo resources be used to pay any and all costs associated with the room. … I believed, rightly or wrongly, that Teneo’s further development of its clients to be bigger donors to the Foundation and CGI was an important priority.”
In another footnote, Band noted “the absence of an established policy” on “comped” CGI tickets and said that most members who attend do so for free. “We encourage the creation of a policy that will be commonly applied — as opposed to applied by exception,” he wrote.
A spokesman for the Clinton Foundation declined to comment on the memo or confirm the authenticity of the document, which was apparently stolen in a massive hack of Podesta’s Gmail account. Hillary Clinton’s campaign has taken a similar tack, declining to comment on the emails, while pointing to evidence that their release is part of a Russian government effort aimed at interfering in the presidential election.
Band declined to comment on the newly released memo, but a Teneo spokesperson sent POLITICO a brief statement Wednesday that appeared to confirm its authenticity.
“As the memo demonstrates, Teneo worked to encourage clients, where appropriate, to support the Clinton Foundation because of the good work that it does around the world. It also clearly shows that Teneo never received any financial benefit or benefit of any kind from doing so,” the spokesperson said.
The dispute over alleged conflicts of interest at the foundation ultimately degenerated into a highly personal dust-up between Chelsea Clinton and Band. Chelsea Clinton insisted that her goals in initiating the outside review were to “professionalize the Foundation, build it for the future and build it in such a way that supported his [Bill Clinton’s] work and mom’s.”
However, she also complained that Band had agitated her father by pressing to preserve Teneo’s ties, including in a phone call on the day Hillary Clinton’s mother, Dorothy Rodham, passed away. “I cannot believe Doug did this on the day my grandmother died,” Chelsea Clinton complained to several top Clinton advisers.
Soon thereafter, Band complained to Podesta that Chelsea Clinton’s demands for changes at the foundation were causing undue stress to various foundation officials, including Clinton Foundation CEO Bruce Lindsey, who suffered a stroke around that time.
“She is acting like a spoiled brat kid who has nothing else to do but create issues to justify what she’s doing because she, as she has said, hasn’t found her way and has a lack of focus in her life,” Band wrote.
In August 2013, amid negative news coverage about the foundation, Bill Clinton issued a statement defending its work around the globe. He also released a summary of the findings of the outside review conducted nearly two years earlier. While Clinton insiders including Chelsea Clinton were preoccupied with the conflict of interest issue, it was not raised in the former president’s statement.
The public version of the summary from law firm Simpson Thatcher does discuss strengthening policies on conflicts of interest, but makes no explicit mention of Teneo.
“Set the tone at the top and encourage a culture where policies are understood and compliance is the norm,” the summary says. “Educate the Board and staff as to proper and timely disclosure of conflicts of interest. … Have all CGI ‘comp Memberships’ vetted by CGI Management to ensure that all such Membership offers advance the interests of CGI.”
The private version of the Simpson Thatcher review, revealed in the WikiLeaks email dump, was more critical of the foundation’s handling of conflicts of interests, noting that directors, officers and employees were confused about “how to raise and clear these conflicts” and often failed to disclose them in a timely fashion, while board members “do not appear to be following the policy.”
“The Foundation indicated on its 2010 Form 990 that it has a written conflict-of-interest policy, requires annual disclosure of potential conflicts of interest, and monitors and enforces compliance with the policy. However, we did not find evidence of that enforcement,” the lawyers wrote.
Band’s memo is marked “attorney-client privilege” and other emails show members of the Clinton team worked to make sure the document and the law firm‘s related findings could be kept confidential by limiting its circulation to individuals officially connected to the foundation.
One reason for the confidentiality: The memo contains what is said to be a complete list of the 20 clients Teneo was advising at the time. It also provides year-by-year details on some major foundation donors.
Coca-Cola, a Teneo client, is listed as giving $4.3 million and pledging a further $2 million over a seven-year period. The figures show a dramatic upswing in Coke’s giving in 2009, which Band attributes to his and Kelly’s efforts.
“Mr. Kelly introduced the CEO of Coca Cola, Muhtar Kent, to President Clinton in January 2009 at a meeting he arranged at President Clinton’s home in DC,” Band writes in one telling passage. “Over the course of 2009, Mr. Kelly cultivated Mr. Kent’s interest in the Foundation — first in CGI and the Foundation. Mr. Kelly asked Mr. Kent to give $5 million to the Foundation, which he pledged in early 2010.”
Other big Clinton Foundation donors who were Teneo clients include Barclays Capital, which gave $1.1 million over a four-year period, Switzerland-based banking giant UBS which gave $540,000 over that time, and the Rockefeller Foundation, which gave $4.2 million over five years.
Among the other firms on Teneo’s donor list: The American Ireland Fund, The Allstate Corporation, Indo Gold, BHP Billiton, AT&T, Black Diamond, Bank of America, Firebird, Liberty Mutual, Stone Harbor, Frank Stronach, TiVo and Mylan Pharmaceuticals.
One expert in law governing nonprofits said the usual way to deal with conflicts of interest is not to blacklist people, but to try to work around the conflict.
“Generally the way conflicts work you disclose them and once you disclose them you excuse yourself from deciding whether the group should or should not do” whatever is at issue, said Philip Hackney, a former IRS official who now serves as a law professor at Louisiana State University.
But where one of the most valuable assets involved is the former president’s time, asking him to be removed from that process seems impossible, the professor said.
“You’ve got to ask Bill Clinton to stop being Bill Clinton, which doesn’t seem likely to happen,” Hackney said.