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As he embarked on his post-presidency life, Mr. Clinton and his wife had relatively few assets and millions of dollars in legal bills. Over the next half decade, he hopscotched the globe, often with Mr. Band at his side, giving speeches at up to $450,000 a pop. He raised large sums for his library and his foundation and snagged nearly $10 billion in commitments through the Clinton Global Initiative.
To help keep Mr. Band from accepting job offers in the private sector, arrangements were made to supplement his income, people familiar with the matter say. Mr. Burkle's Yucaipa operation, for example, paid Mr. Band through a company called SGRD, these people say. In 2001, Mr. Band and a family member set up two entities in Florida using the SGRD name, public records indicate. Mr. Clinton's spokesman didn't respond to questions about Mr. Band's financial relationships, other than the one with Mr. Follieri.
When Mr. Follieri arrived in Manhattan in 2003, he had big ambitions. Citing the changing demographics of many U.S. Catholic dioceses and the litigation costs of the church's sex-abuse scandals, he told potential investors that the church needed to sell lots of property. Buying such properties and redeveloping them could help both the church and urban communities where many of properties were located -- and would produce tidy profits for investors, according to Follieri Group marketing material and presentations.
A résumé posted on the company's Web site says that while Mr. Follieri was attending the University of Rome in the late 1990s, he founded a cosmetics company called Beauty Planet that attained "tremendous success" and licensed a line of products to "an internationally renowned hairstylist." Beauty Planet financial records on file in Italy indicate that the firm was small and had three straight years of losses, although Mr. Follieri has told people the company was ultimately profitable.
Mr. Follieri's résumé also says he worked as executive vice president of EFFE Holdings, "a London based, privately held investment firm" that "purchases large real estate packages from government holdings in Europe and the Middle East" and "is also active in oil trading as well as gold and diamond mining," with "mining operations in Gambia, Senegal and Angola." British public records show an EFFE Holding Ltd., with Mr. Follieri listed as a director, was formed in 2002 and dissolved two years later. (Mr. Follieri has told people there also is an EFFE entity in Luxembourg involved in those activities.)
Mr. Follieri's father, Pasquale, is president of the Follieri Group. In 2005, he was convicted in an Italian court of misappropriating more than $300,000 from a failed resort company whose assets he had been charged with overseeing. He has denied wrongdoing and has appealed the conviction.
By early 2005, Mr. Follieri was cropping up in New York tabloids as the boyfriend of Ms. Hathaway, a rising Hollywood star whose movie credits include "The Princess Diaries," "The Devil Wears Prada" and "Becoming Jane." The 24-year-old actress sits on the board of the Follieri Foundation, a charitable entity that Mr. Follieri started. Although she was mentioned in Mr. Burkle's lawsuit against Mr. Follieri, she isn't a defendant. In a statement earlier this year, Ms. Hathaway's spokesman said she has "faith the court system will sort this out."
Mr. Follieri was introduced to Mr. Band by a mutual acquaintance in the spring of 2005. The two "met and spoke frequently" and socialized, says Mr. Carson, Mr. Clinton's spokesman, adding that Mr. Band had such regular contact with many people.
One of the introductions Mr. Band provided was to Mr. Burkle, and in mid-2005, Mr. Follieri struck his deal with the investor. A Yucaipa partnership where Mr. Clinton served as a senior adviser formed a joint venture with the Follieri Group. Yucaipa agreed to invest as much as $100 million into the venture to buy church properties for redevelopment as mixed-income housing units, community centers and retirement facilities, among other things.
Mr. Follieri moved his business operation into leased office space on Park Avenue. He employed Filipino nuns as receptionists and installed a small altar in one room, according to people who visited the office. He began renting an "extremely costly" penthouse, complete with a staff that included an executive chef, the Yucaipa lawsuit says. Although it was supposed to be for the joint venture, Mr. Follieri moved his personal effects there and appeared to take up residence, the suit says. A spokesman for Mr. Follieri says the Italian's residence in the $40,000-a-month penthouse "has nothing to do with Yucaipa."
The Follieri Foundation pledged $1 million to vaccinate Honduran children against hepatitis. At last year's annual meeting of the Clinton Global Initiative, Mr. Follieri was individually called on stage for a personal thank you from Mr. Clinton.
Mr. Follieri's connection to the Clinton camp opened horizons outside of the U.S. Being honored by the former president "adds credibility" to a person, says a spokeswoman for Bahrain's Economic Development Board, whose chief executive, Sheik Mohammed bin Essa Al-Khalifa, met Mr. Follieri through the Clinton Global Initiative. Mr. Follieri subsequently visited Bahrain seeking investment dollars, but he didn't leave with a deal. His Clinton ties also helped get him a meeting in São Paulo with former Brazilian president Fernando Henrique Cardoso, part of an effort to find additional investors, people familiar with the meeting say.
Mr. Follieri also approached Mexican tycoon Carlos Slim, by some calculations the world's richest man, who has been a major supporter of Clinton humanitarian efforts. In July 2005, Messrs. Follieri, Burkle and Band visited Mr. Slim on his yacht in the Sea of Cortez for an afternoon of chatting and jet skiing, according to people involved in the trip. There were subsequent communications about a possible joint Latin American real-estate venture, but no deal was closed, these people say. |
