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The Clinton Files: Those White House Coffee Klatsches

From 1993 to 2001, Alexander Cockburn and I wrote dozens of articles on the political corruption of Bill and Hillary Clinton and their cronies in DC and Arkansas. In many ways, those years represented the golden age of political journalism, with a fresh scandal ripening each month. As Hillary cruises toward the Democratic nomination, if not the White House, it’s time to dig into the Clinton Files and resurrect the stories of sleaze, malfeasance and transgression from that feculent decade. — JSC

Between Jan. 1, 1995 and Aug. 23, 1996, some 1,500 people were invited to the White House for coffee sessions with President Clinton, First Lady Hillary Rodham Clinton, and Vice President Al Gore. The coffees were a fundraising scheme hatched by Clinton’s longtime political adviser Dick Morris, and may have raised more than $3.5 million for the Democratic National Committee and the Clinton/Gore re-election effort. But now the questions are, who were the donors invited to these gatherings and what promises did they receive from the administration in exchange for their political contributions?

First, some sociology on the attendees. By far the most heavily represented group were the Washington lobbyists, arriving in a familiar torrent of names: Patton, Boggs, and Blow, the most influential firm on the Hill; Skadden, Arp, the Republican lobby-shop; the PR house of Hill & Knowlton; Mickey Kantor’s old firm, Manatt, Phelps, and Phillips; and Davis, Polk and Wardwell, the law offices of Robert Fiske, the first special prosecutor in the Whitewater scandal.

Chasing close on the lobbyists’ heels were the bankers, bond traders, and mutual fund operators, including executives from Morgan Stanley, Lehman Brothers, Goldman Sachs, and Chase Manhattan. One intriguing session, which seems particularly ripe for the scrutiny of a special prosecutor, occurred on May 13, 1996, between the top 16 bankers in the country, the President of the United States, the Comptroller of the Currency, and the Secretary of the Treasury.

Third in frequency was the telecommunications sector, headlined by what must have been a tense session with Sumner Redstone, who owns the controlling interest in cable giant Viacom, and the company’s CEO, Frank Biondi, who Redstone fired soon thereafter. Also making an appearance were executives from Time/Warner, Disney, Knight-Ridder, Miramax and the Wall Street Journal, whose editorial page pounds out a daily anti-Clinton drumbeat. Remember that in this period the largest “reform” of telecommunications since 1932 was in progress, with billions at stake. Telecommunications companies wired the Democratic Party with nearly $20 million.

Next came the health care and insurance lobbies, which were keen on killing any new initiative for a national health care system. The most frequent insurance company sipping coffee with the president was Travelers Group, whose executives attended no less than seven White House klatsches, one of them ennobled by the attendance of Travelers’ CEO Sanford Weill, at $50 million a year the highest paid corporate executive in 1995. Weill made clear his position on product liability lawsuits: He wants them limited.

Close behind were the energy and oil companies. Executives from Enron, Exxon, Amoco, Arco, and Phillips all graced the White House with appearances. But the most frequent visitor from the fossil fuel sector was Stan McLelland, the executive vice president of Valero Energy of San Antonio. Valero was a big supporter of NAFTA because the firm had embarked on a joint venture with the Mexican oil company PEMEX. Valero was also keen on the Mexican bailout and on U.S. help to Mexico in suppressing any attacks by insurgent groups on PEMEX facilities. McLelland wrote personal checks to the tune of $130,000 to the Democratic National Committee during the time when the klatsches were taking place. With energy deregulation going through Congress, nearly every oil and gas company was beating a path to 1600 Pennsylvania Avenue.

Another rather unsavory guest from the oil lobby was Roger Tamraz, a CIA asset and an international fugitive. Tamraz, who was born in Cairo and now resides in New York City, is an international oil financier who runs a company called Oil Capitol Ltd. In the past decade, he has entered into shady financial deals with members of both the Saudi and Israeli intelligence agencies. He was also involved in the BCCI banking scandal. In 1989, the Lebanese government accused Tamraz of embezzling $200 million from a Beirut investment firm and issued an international warrant for his arrest. This was followed by a French court ruling that held Tamraz liable for $56 million for his role in the looting of a French bank.

For the past three years, Tamraz has been attempting to cobble political and financial support for a grandiose pipeline scheme in one of the world’s most turbulent regions, the Caucasus Mountains. Tamraz has proposed the construction of an 930-mile pipeline from the Caspian Sea across the warring territories of Armenia and Azerbaijan to a Turkish port on the Mediterranean. It was this project that Tamraz hoped to discuss with the President at the coffee klatsch on April 1, 1996. That session was followed by a June reception at the White House, which included dinner and a movie with the First Family. Both the National Security Council and the Central Intelligence Agency recommended that Tamraz be denied entry to the White House. The CIA maintained a thick file on Tamraz’s background and business enterprises, since the oil entrepreneur had been an intelligence source for the agency on Middle East issues for years.

But in a possibly illegal move Don Fowler, chairman of the Democratic Party’s National Committee, intervened, demanding that the CIA and NSC withdraw their objections to Tamraz’s entry to the White House. In response to Fowler’s calls, the CIA prepared a new briefing profile on Tamraz that deleted all derogatory information. Though unscrupulous, Fowler’s efforts on behalf of the oil tycoon are understandable through the political calculus of Babylon. In 1995 and 1996, Tamraz and his company gave $177,000 to the DNC.

Deciphering the inducements offered and rewards received by the presidential coffee sippers is not an arduous task for even the novice investigator. Start with the most frequent single visitor to the klatsches, Alfonso Fanjul, the fanatically anti-Castro resident of Miami. He is the most prominent member of the sugar family that owns Flo-Sun Inc. Flo-Sun operates vast plantations of sugar cane around the southern shore of Lake Okeechobee in Florida. Fanjul maintains a keen interest in aborting any environmental legislation that might inhibit his companies’ capacity to discharge phosphorus into the Everglades.

Fanjul showed up at the klatsches five times, including an Oct. 13, 1995, session with Al Gore who, at that very moment, was crafting a another “win-win” compromise protecting the sugar lords while throwing a morsel to the establishment greens by going through the motions of protecting the nation’s most famous wetland. The next time Fanjul visited the White House, on Dec. 18, 1995, he was in the company of Jeffrey Leonard, the manager of the Global Environment Fund, a group advocating the virtues of green capitalism.

From December of 1995 through February of 1996, the administration regarded the support the mainstream enviro groups as of crucial importance in the 1996 race. This concern is duly reflected in the klatsches. On Dec. 15, 1995 two corporate executives who sit on the board of the Wilderness Society sipped coffee with Clinton. One of them was real estate baron Richard Blum–husband of Dianne Feinstein–who is also a longtime friend and sometime business partner of Charles Hurwitz, the corporate raider from Houston who wanted the government to purchase from him at an exorbitant price the Headwaters Redwood Forest in Northern California. The other attendee was David Bonderman, a financier and chairman of Continental Airlines. Bonderman is based in Houston and is also a pal of Hurwitz. Six months after this session, Sen. Dianne Feinstein brokered a Headwaters deal for the administration that was highly favorable to Hurwitz. The Wilderness Society was the only national environmental group to praise the bailout.

On Feb. 13, 1996, the president hosted a coffee klatsch attended by Peter Meyers, the director of the supposedly apolitical W. Alton Jones Foundation, one of the largest funders of the environmental movement and itself deriving its money from the Citgo Oil Company. Meyers’s presence at a political fundraising event raises serious questions about the role nonprofit groups played in the last election. By law foundations and charitable groups are not permitted to be engaged in political activities. One of Meyers’s close friends is Debra Callahan, who had worked at the Jones Foundation from 1990 through 1994. Callahan now runs the League of Conservation Voters, the political action committee of the mainstream environmental groups, which only weeks after this meeting endorsed Clinton as the greatest environmental president in the history of the Republic.

The last coffee klatsch was by no means the least. One of the people in attendance that day (Aug. 23, 1996) was Gary Jacobs, the CEO of the Laredo National Bank of Texas. This institution is now undergoing a criminal probe by the Justice Department, suspected as being an entrepôt for Mexican drug money. Laredo is one of the first U.S. banks to be purchased by a Mexican citizen, billionaire Hank Carlos Rohn. Rohn is one of the wealthiest citizens in Mexico, making hundreds of millions of dollars on the privatization of Mexican industries. It appears that the Laredo Bank may have been one of the ways Raul Salinas, the imprisoned brother of former Mexican president Carlos Salinas, diverted more than $170 million out of Mexico. Much of that money is expected to have come from the Mexican drug trade.

This article was originally published by CounterPunch in 1996.

Jeffrey St. Clair is editor of CounterPunch. His new book is The Big Heat: Earth on the Brink co-written with Joshua Frank. He can be reached at: sitka@comcast.net. Alexander Cockburn’s Guillotined! and A Colossal Wreck are available from CounterPunch.

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