Text 28903, 183 rader
Skriven 2007-05-26 13:57:00 av Jeff Binkley (1:226/600)
Ärende: Mr and Mrs Clinton
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http://www.nytimes.com/2007/05/26/us/politics/26clinton.html?ei=5065&en=28ac0e6
fe30ffa65&ex=1180756800&partner=MYWAY&pagewanted=print

May 26, 2007
Suit Sheds Light on Clintons Ties to a Benefactor
By MIKE McINTIRE

When former President Bill Clinton and Senator Hillary Rodham Clinton took a
family vacation in January 2002 to Acapulco, Mexico, one of their longtime
supporters, Vinod Gupta, provided his companys private jet to fly them there.

The company, infoUSA, one of the nations largest brokers of information on
consumers, paid $146,866 to ferry the Clintons, Mr. Gupta and others to
Acapulco and back, court records show. During the next four years, infoUSA paid
Mr. Clinton more than $2 million for consulting services, and spent almost
$900,000 to fly him around the world for his presidential foundation work and
to fly Mrs. Clinton to campaign events.

Those expenses are cited in a lawsuit filed late last year in a Delaware court
by angry shareholders of infoUSA, who assert that Mr. Gupta wasted the companys
money trying to ingratiate himself with his high-profile guests.

The disclosure of the trips and the consulting fees is just a small part of a
broader complaint about the way Mr. Gupta has managed his company. But for the
former president, and for the senator who would become president, it offers
significant new details about their relationship with an unusually generous
benefactor whose business practices have lately come under scrutiny.

In addition to the shareholder accusations, The New York Times reported last
Sunday that an investigation by the authorities in Iowa found that infoUSA sold
consumer data several years ago to telemarketing criminals who used it to steal
money from elderly Americans. It advertised call lists with titles like Elderly
Opportunity Seekers or Suffering Seniors, a compilation of people with cancer
or Alzheimers disease. The company called the episodes an aberration and
pledged that it would not happen again.

Asked to describe Mr. Clintons consulting services, an infoUSA official said
they were limited to making appearances at one or two company events each year.
Jay Carson, a spokesman for Mr. Clinton, would not elaborate on what the former
president does for infoUSA, but said that he shared the publics concern about
misuse of personal information.

It goes without saying that any suggestion that seniors are being preyed upon
should be fully investigated and addressed by the appropriate agencies, Mr.
Carson said.

Aides to Mrs. Clinton were at pains to distance her from infoUSA, pointing out
that she had sponsored legislation that would strengthen privacy rights of
consumers. As for the flights on infoUSAs plane, Phil Singer, Mrs. Clintons
spokesman, said the senator complied with all the relevant ethics rules on
accepting private air travel.

Ethics rules for senators and candidates require only that the recipient of a
flight make reimbursement at a rate equal to that of a first-class ticket, a
long-derided loophole that allows special interests to provide de facto gifts
of expensive private air travel, which generally costs far more than commercial
fares. Mr. Singer would not say what Mrs. Clinton paid for her flights.

InfoUSAs troubles come at an especially awkward moment for Mrs. Clinton, since
Mr. Gupta is among a loyal coterie of reliable fund-raisers whom she would be
expected to turn to as she pursues the Democratic presidential nomination. He
has raised hundreds of thousands of dollars for the Clintons campaigns over the
years, and has donated $1 million to Mr. Clintons foundation.

The Clintons role in the shareholder suit has been largely overlooked even as
the presidential race has heated up. The Deal, a business publication, said in
a February article about infoUSA that the lawsuits references to an unnamed
former high-ranking government official and his wife appeared to describe Mr.
and Mrs. Clinton.

Neither aides to the Clintons nor infoUSA disputed that the complaint referred
to the Clintons.

An entrepreneur from India, Mr. Gupta, 60, founded infoUSA in Omaha in 1972 and
built it into a publicly traded company with more than $400 million in revenue.
Along the way, he nurtured a taste for politics, becoming a major Democratic
fund-raiser and a Lincoln Bedroom guest in the Clinton White House.

Before leaving office, Mr. Clinton appointed Mr. Gupta to the board of the
Kennedy Center for the Performing Arts. Earlier, Mr. Clinton had nominated him
for two minor ambassadorships, which Mr. Gupta declined because of business
commitments.

Vins done a very good job over the years finding ways to get connected, said
Stormy Dean, the chief financial officer of infoUSA and onetime candidate for
governor in Nebraska, where the company is based.

I dont know whether hes ever got anything out of his connections in politics,
Mr. Dean said. But he likes it, and hes good at it. Hes a legitimate American
success story.

Mr. Gupta declined to comment for this article.

Mr. Gupta is clearly proud of his friendship with the Clintons. He once had a
personal Web site  it was taken down last year  where he posted photographs of
himself socializing with them. One showed him with Mr. Clinton on a golf
course, arms draped around each other and smiling; another showed Mrs. Clinton
posing with the Gupta family in Aspen. Mr. Gupta even dedicated two school
construction projects he financed in a rural part of his native India to the
Clintons, naming one of them after him and the other after her.

After Mr. Clinton left office, Mr. Gupta was one of two businessmen with whom
the former president agreed to enter into consulting arrangements (the other
was Ronald W. Burkle, a billionaire investor and major Democratic donor). In
2002, Mrs. Clinton began reporting her husbands work for infoUSA on her Senate
financial disclosure forms, but she does not have to disclose his income and it
is not clear what he is paid.

The shareholder lawsuit against infoUSA, brought by two Connecticut-based hedge
funds, Dolphin Limited Partnership and Cardinal Capital Management, forced that
information into the open. It charges that Mr. Guptas spending on the Clintons
is part of a pattern of improper company expenditures for things like luxury
cars, jets and houses, as well as a yacht that is notable for being one of the
few to have an all-female crew.

Mr. Gupta has defended the expenses as legitimate and business-related, and he
has accused the hedge funds of trying to wrest control of the company through a
smear campaign. Mr. Gupta has moved to have the lawsuit dismissed; a decision
is pending.

Representatives of Dolphin and Cardinal declined to comment. Herbert A. Denton,
president of Providence Capital, a New York hedge fund that also invested in
infoUSA and had pressed for management changes, said the expenditures cited in
the lawsuit were hard to defend.

When the C.E.O. of a publicly traded company can say with a straight face that
the shareholders benefit from having a yacht with an all-female crew stationed
in the Virgin Islands, then youve got a problem, Mr. Denton said.

The lawsuit says Mr. Clinton signed a consulting agreement in April 2002 to
provide confidential advice and counsel to the chairman and C.E.O. of the
company for the purpose of strategic growth and business development. InfoUSA
made $2.1 million in quarterly payments to Mr. Clinton from July 2003 to April
2005, and in October 2005 entered into a new three-year agreement to pay him
$1.2 million. It also gave him an option to buy 100,000 shares of infoUSA
stock, with no expiration date.

The complaint asserts that the contracts with Mr. Clinton are extremely vague
to the point of being wasteful. It says they state that Mr. Clinton will not
lobby for infoUSA, and that the company cannot use his name, likeness or
association for any business purpose.

Mr. Dean said the former presidents presence at company events adds a lot of
credibility to infoUSA in business circles. Mr. Clinton normally commands
$125,000 to $300,000 for the many speeches he gives each year, and has earned
almost $40 million on the lecture circuit since leaving office.

Mr. Dean said Mr. Clinton had no role in infoUSAs data collection and
distribution business, which was criticized by the authorities in Iowa who
uncovered the questionable sales of call lists during an investigation of
unscrupulous telemarketers in 2005. After the Times article on Sunday about
that case, officials at the Federal Trade Commission indicated they were
considering opening their own inquiry into infoUSAs practices.

Mr. Dean also said that the numerous flights infoUSA provided for Mr. Clintons
nonprofit foundation activities constituted charitable donations, for which the
company was entitled to a tax deduction. The flights included trips to European
capitals, Alaska, Florida, Hawaii and Mr. Clintons home state of Arkansas.

Mrs. Clintons use of infoUSA planes appears to be mostly campaign related. In
one instance cited in the lawsuit, Mrs. Clinton traveled at the companys
expense aboard a private jet from White Plains, N.Y., to Detroit, Mich., and
then to Fort Lauderdale, Fla., and home to White Plains, N.Y., after calling
the company the previous day in desperate need of a plane.

InfoUSA paid $18,480 in January 2004 to fly Mrs. Clinton and her four-person
entourage to New York from New Mexico, where she had made a campaign appearance
and attended a book signing. Campaign finance records show that her committee,
Friends of Hillary, made a reimbursement of $2,127 for that flight. It was not
clear if any other candidate committees in New Mexico also helped defray some
of the cost.

Her aides said that in addition to using campaign money to pay for some of the
infoUSA flights, Mrs. Clinton used personal finances to pay for parts of any
flights that did not involve political activities, like the 2002 trip to
Acapulco. As for why infoUSA paid anything at all for a round-trip flight to a
vacation destination, Mr. Dean insisted it was a legitimate expense.

Im not sure what they were doing down there, Mr. Dean said, but it was business
related.

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