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International

Gupta’s ‘Clinton fund’ under scanner

LA Times-Washington Post

Posted online: Sunday, May 27, 2007 at 0000 hrs Print Email

WASHINGTON, May 26:For the past four years, Bill and Hillary Rodham Clinton have jetted around on Vinod Gupta’s corporate jet, to Switzerland, Hawaii, Jamaica, Mexico—US$ 900,000 worth of travel. The former president secured a US$ 3.3 million consulting deal with Gupta’s technology firm. His presidential library got a six-figure gift, too.

Gupta, whose big donations to the Democratic Party earned him a Lincoln Bedroom overnight when Bill Clinton was president, has emerged as a key benefactor of Clinton’s post-presidency—and Hillary Clinton’s presidential candidacy.

Gupta’s generosity toward the Clintons has proven so controversial within his firm that it prompted a shareholder lawsuit complaining that hiring the former president for the “extremely vague purpose” of providing his “strategic growth and business judgment” was a “waste of corporate assets”.

Founded in 1972, Gupta’s firm InfoUSA is now valued at US$ 600 million and says that it provides database marketing and processing services to more than 4 million customers.

The Clintons are not parties to the lawsuit, filed earlier this year, nor are they accused of any wrongdoing. In fact, the lawsuit refers only to a “former high-ranking government official” and his wife. But company officials, shareholders and aides to the Clintons confirmed that they are the couple in question.

The jet travel for the Clintons was charged to the company as “business development” expenses, the lawsuit said. The company jet took them to vacation spots, whisked the former president to an international conference in Geneva and to a commemorative speech in Oklahoma City, and shuttled Hillary Clinton to a campaign fundraiser in New Mexico.

The Clintons complied at the time with federal law by reimbursing Gupta for a portion of the costs for the flights Hillary Clinton took to political and other events. The Clintons do not have to reimburse InfoUSA for any of Bill Clinton’s travel, and they had to pay only first-class airfare for her travel, a fraction of the actual cost.

The dispute over Gupta’s bankrolling of the Clintons offers new detail about how successfully Clinton has leveraged the inner circle of donors he cultivated during his tenure in the White House to his personal financial benefit since he left office. In addition, it suggests the degree to which Hillary Clinton’s political career is also benefiting from those connections.

Jay Carson, a spokesman for the former president, declined to discuss the consulting arrangement. Carson described Gupta as a “longtime friend and supporter”.

Stormy Dean, InfoUSA’s chief financial officer, confirmed the flights and that payments went to Clinton but said that the company believes the shareholder complaints are without merit. “Our position is that these expenses are legitimate business expenses,” he said.

Gupta met Bill Clinton in the mid-1990s and quickly became a generous patron. And in return, Clinton offered him two diplomatic posts—as US counsel general to Bermuda and as US ambassador to Fiji—that he didn’t take. The president appointed him to the John F Kennedy Center Board of Trustees during his last week in office.

Both Bill and Hillary Clinton agreed to lend their names to technology schools that Gupta financed in rural India.

Gupta, who grew up in dire poverty in India, has said publicly that he relished his relationship with Bill Clinton. In a 2000 interview with The Washington Post, Gupta described the thrill of crawling into bed in the Lincoln Bedroom. He said he called his mother to tell her, “I’ve come a long way.”

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