HILL'S '08 HEADACHE
By DICK MORRIS & EILEEN MCGANN
April 27, 2006 -- UN-PRESIDENTIAL CONFLICTS OF INTEREST?
When Hillary Clinton runs for president in 2008, Bill Clinton's
affiliation with billionaire Ron Burkle's Yucaipa Companies could become
the new Bill & Hill scandal - the equivalent of Whitewater.
It's not that the various Yucaipa funds - which invest money for foreign
and domestic investors - have done anything wrong; they haven't. But the
company's investments have the potential to create conflicts of interest
for the Clintons.
Like any U.S. senator, Hillary regularly casts votes that help or harm
various interests - including, inevitably, the interests of the
multibillion-dollar Yucaipa funds.
The issue looms larger in the wake of a story in last Sunday's New York
Times, which quotes Burkle as estimating that he spends about 500 hours a
year with the ex-president. That works out to about 10 hours a week - the
closest thing Bill now has to a regular job.
The Times also reports that Bill stands to clear tens of millions of
dollars - with virtually no risk - from his Yucaipa work. Yet Hillary's
Senate financial disclosures for 2003 and 2004 list as Bill's only Yucaipa
income "more than $1,000" in "guaranteed payments" as a partner in Yucaipa
Global Opportunities Fund 1, LLC.
How does that work? Most of Bill's gains are backloaded - he'll clear
those millions if the funds average returns above 9 percent over their
lifetime. And Yucaipa says they're doing even better than that now.
But, until the funds are liquidated, there's no income for Hillary to
report - even though the riches are destined for her pocket, too.
If Hillary's a presidential candidate, such conflicts of interest are even
more relevant.
Yet we have no real idea how much of a conflict all this truly poses. Only
the Clintons know - because they won't release their tax returns and will
give only the most vague descriptions of Bill's work with Yucaipa.
The Clintons should tell the voters exactly what Yucaipa investments Bill
works on, and exactly what his compensation is.
Imagine if, back when George W. Bush was seeking the presidency, Laura
Bush were lining up vast profits as an adviser to multibillion-dollar
private investment brokers, who stood to benefit from specific federal
actions. If she wouldn't disclose more, there'd be hell to pay. The same
rule must apply to a couple where the husband's investing while the wife
runs for office.
As things stand, Hillary's next disclosure form, due May 1, will report
merely that Bill received in excess of $1,000 from Yucaipa - hardly the
level of specificity to which her constituents (and future voters
nationwide) are entitled.
The case for disclosure rises even further as Burkle pursues a deal to buy
a number of American daily newspapers, including the Philadelphia
Inquirer, the largest paper in the swing state of Pennsylvania. Will
Bill's partner own a string of newspapers at the same time that Hillary is
running for president?
Then there's the Dubai factor.
When Bill joined Yucaipa, the announcement said only that the former
president would be working on two other funds - Yucaipa's American Fund
and its Corporate Initiative Fund. But the Times reports, "Clinton is also
a partner in a Yucaipa fund that invests in overseas ventures, for which
he receives regular payments and would draw one-third of the profits when
the fund is dissolved at least five years from now."
And Yucaipa last year joined with the Dubai Investment Group to create a
new U.S. company: DIGL Inc., which invests the private funds of Dubai's
crown prince, Sheik Mohammed bin Rashid al Maktoun, the fifth-richest man
in the world according to Forbes. Even if Bill's not directly working with
that Yucaipa account, he and Hillary can expect to make millions via a
company that works with the sheik.
(Of course, Dubai's known past generosity to Bill and institutions he
controls, such as his presidential library, totals a very solid six
figures. During the recent ports-deal flap, that relationship had former
President Clinton advising and publicly defending Dubai - even as Sen.
Clinton was denouncing it.)
Is Bill Clinton getting regular payments from a fund that invests the
prince's money? Again, the Clintons should tell us.
If a foreign head of state is even indirectly paying the spouse of a U.S.
senator and presidential candidate, the need for disclosure becomes
obvious. (The same principle also holds for Bill's other hat - an
ex-president posing as a disinterested commentator on America's Middle
East relationships.)
Learn these facts well. The tycoon, the ex-president and the sheik are
likely to be recurring topics as a Hillary presidential candidacy looms.
Eileen McGann co-authored this column.
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