Thursday, September 29, 2016

Hillary Clinton's Special Loans

Clinton was clearly prepared to play defense on questions relating to her personal finances. It is interesting that her first defense centers on the family’s 15-year-old legal fees. It is true that the Clintons’ copious debts forced the former first family to make some humiliating compromisesafter leaving office, including but not limited to borrowing money from fundraiser-turned-Virginia Gov. Terry McAuliffe in order to purchase a New York home ahead of Clinton’s 2000 U.S. Senate bid.

Clinton's Home Loan Deal Raises Questions

By Ruth Marcus
Washington Post Staff Writer
Saturday, September 4, 1999; Page A1
After President Clinton and fund-raiser extraordinaire Terry McAuliffe played a round of golf in upstate New York on Tuesday, the president made an unscheduled visit to St. Camillus Nursing Home to visit McAuliffe's ailing 79-year-old mother, Millie, who recently had hip replacement surgery.
Later in the week, McAuliffe returned the favor – and then some. When former White House chief of staff Erskine B. Bowles at the last minute balked at guaranteeing a $1.35 million mortgage for the Clintons' new house in Chappaqua, N.Y., McAuliffe rode to the president's rescue.
In a move that enables the Clintons to buy the house – and Hillary Rodham Clinton to have a base for her New York Senate run – the 42-year-old real estate developer and dealmaker pledged to put up $1.35 million in cash to secure a mortgage for the Clintons. Otherwise, swamped by more than $5 million in legal debts, the Clintons might have had difficulty obtaining the loan for the five-bedroom, century-old house.
Ethics law experts said yesterday that there is no legal difficulty with the Clintons' accepting McAuliffe's help, but some questioned the propriety of the president's accepting such a benefit from a private citizen.
"It's just plain wrong. It's dangerous. It's inappropriate," said Fred Wertheimer of Democracy 21. "This is a financial favor worth over a million dollars to the president."
McAuliffe is not actually giving any money to the Clintons. Rather, he will deposit $1.35 million in cash – the full amount of their mortgage – with Bankers Trust; the only risk to McAuliffe's money is in the unlikely event that the Clintons default.
The Clintons will put up $350,000 and pay an adjustable-rate mortgage set at one point over the London Interbank Offered Rate, a bank lending rate that is now 5.52 percent. The loan is "interest-only," meaning the Clintons pay only interest on the loan but do not reduce the principal during the five-year term.
Some mortgage bankers said McAuliffe's intervention either allowed the Clintons to obtain what might appear to be an otherwise risky loan or to secure a lower interest rate because the mortgage is fully backed by collateral. "They would definitely be in a better position to get a better rate with that deal," said Crestar Mortgage Corp. senior vice president Patrick Casey, incoming president of the Mortgage Bankers Association of Metropolitan Washington.
White House spokesman Jim Kennedy said the arrangement was "deemed to be the most sensible mortgage, given their situation."
Neither Bankers Trust nor the White House would provide details yesterday about what interest McAuliffe would earn. Financial experts said that it was likely to be well below what he could reap in the stock market or from his investments, but that there would be little inconvenience for McAuliffe if he keeps a significant amount of his wealth in cash.
A source close to McAuliffe described the transaction as "risk-free." McAuliffe's business has included such enterprises as developing real estate in Florida, selling title insurance, marketing credit cards to unions and running a bank.
"It's not a legal issue, it's a perception issue," said Charles R. Lewis of the Center for Public Integrity. "I am always uncomfortable when people who give money or raise money are personally involved with a public official financially. . . . It's worrisome for a sitting president to be this dependent on any one person financially."
The White House said it was going beyond legal requirements in revealing McAuliffe's role, noting that the Office of Government Ethics had advised it that McAuliffe's guarantee of the loan was not a "gift" that must be reported on the Clintons' annual financial disclosure form. The ethics office reasoned that, because the guarantee is only a promise for the future, it does not have current cash benefit that has to be included on the forms, a government official said.
"Even though we have no obligation to do so, we decided to make public the details about the mortgage in an effort to be as transparent as we can," Kennedy said.
"We believe the public does have a right to know about this and people are free to make their own judgments about it," Kennedy added. "Terry McAuliffe is a close friend of the president and he's happy to be of some help here, but since this is Washington, it's not surprising that some people can find a way to be critical."
However, some ethics experts said that other executive and legislative branch officials might be prohibited from accepting such help. Although federal employees are prohibited from taking most gifts, the rules make an exception for the president and vice president – a difference originally intended to allow them to accept gifts from foreign dignitaries but that has since been invoked in permitting Clinton, for example, to accept contributions to his legal defense fund.
Even if a mortgage guarantee is not considered a gift for the purposes of the disclosure form, a government official said, it could be deemed a gift – and prohibited to other government employees – under the rules restricting acceptance of such benefits.
"It's hard to imagine how it isn't a gift," said one private lawyer who specializes in government ethics. "It's not that he wrote him a letter commending his character. He's put $1.3 million in cash out and doesn't have the use of that for the period of the balloon clause. . . . There's no way of seeing it as something not of value to the Clintons."
The Clintons are not the first presidential family to have friends come to their aid in buying a house. In 1986, 18 friends contributed $2.5 million to buy Ronald and Nancy Reagan a retirement home in Bel Air when a house Nancy Reagan liked went on the market. The Reagans eventually bought the property.
This is far from the first time McAuliffe has come to the aid of the Clintons. He headed fund-raising for the president's 1996 reelection campaign, devising the strategy that included wooing big donors with such benefits as overnight stays in the Lincoln Bedroom. Now, McAuliffe has taken on an array of tasks for the first family: spearheading efforts to help the Clintons dig themselves out of their legal debt, overseeing fund-raising for Clinton's presidential library and helping raise money for Hillary Clinton's campaign.
Indeed, McAuliffe is so instrumental to Clinton's financial future that the president has resisted efforts to lure McAuliffe to return to the Democratic National Committee, where McAuliffe was finance chairman during Clinton's first term.
McAuliffe is one of the small circle of friends who are the recipients of late-night phone calls from Clinton. Last February, as the Senate debated the articles of impeachment against the president, Clinton invited McAuliffe to the White House to celebrate McAuliffe's 42nd birthday with Dom Perignon and an overnight stay in the Lincoln Bedroom.
Known universally around Washington as "the Macker," McAuliffe first made his mark in national fund-raising when he worked for the Democratic Congressional Campaign Committee under California Rep. Tony Coelho. By 1988, McAuliffe was the chief fund-raiser for Missouri Rep. Richard A. Gephardt's presidential campaign. In 1992, when Clinton was making his first run for the presidency, McAuliffe was the chief fund-raiser for one of his Democratic rivals, Iowa Sen. Tom Harkin.
Since then, things have changed. "I can tell you this," McAuliffe said Thursday night at a Syracuse fund-raiser that one of his kindergarten friends was hosting for Hillary Clinton. "I have no closer friends than the president and first lady."
Staff writers Jennifer Frey in Skaneateles, N.Y., and Susan B. Glasser and researcher Madonna Lebling in Washington contributed to this report. 
© 1999 The Washington Post Company


But the Clinton’s long ago overcame this adversity. While many of her speeches are unpaid, those who do pay for the privilege of learning from Hillary’s wisdom are not stingy about it. As of March, since leaving her post at the State Department, Clinton made close to $5 million in speaking fees. She also secured an $8 million advance for her book. Together with her husband, the Clintons made $109 million in the past 7 years.

All that income isn’t sitting well with some. “Clinton’s decision to pocket six-figure sums from Big Finance heavyweights and other corporate players might tarnish her public image, says Russ Baker, a Rutgers University political scientist,” wrote Mother Jones reporter Andy Kroll. “Baker notes that Clinton’s coziness with Wall Street could come back to bite her in a Democratic primary, especially at a time when populist figures such as Sen. Elizabeth Warren (D-Mass.) and New York City Mayor Bill de Blasio are ascendant within her Democratic Party.”

It remains to be seen if doubts about Clinton’s commitment to the progressive cause can be quashed by reminding voters that she once had to accept a $1.35 million loan from McAuliffe.

Clinton: Can end inequality 'cancer'



Hillary Clinton said Wednesday that Americans have the capacity to deal with problems such as the “cancer of inequality” but can do so only by coming together and making “hard choices.”
That message came through a Facebook video, the latest step in the rollout of the former secretary of state’s upcoming memoir, “Hard Choices.” The book, due out June 10, will be followed by a closely watched book tour, a possible prelude to a presidential bid.
“At the time I became secretary, there was a fairly strong current of thinking that the United States was in decline,” Clinton says in the video. “ … I didn’t believe it then, and I don’t believe it now, but I also don’t believe that our leadership is somehow endowed from [the] birth of our country. I think people will see that we are strong and well-equipped to restore prosperity here at home, to deal with the cancer of inequality, to give people in our country the ladders of opportunity that have always been a hallmark of the United States and the American Dream, but they will recognize that doesn’t happen by accident or wishing for it or engaging in ideological and rhetorical battles.”
Clinton, the leading possible Democratic 2016 contender, has highlighted her commitment to combating economic inequality over the last several months in speeches she has given across the country. That issue is particularly important to the progressive wing of the Democratic base, where some view her with skepticism.
In the video, which clocks in at about four minutes, Clinton says her book will offer “behind-the-scenes insight, particularly about my relationship with President Obama, with the White House, but also my views about what we needed to do to restore American leadership.”
Seeking to bridge her foreign policy experience with domestic concerns, she adds, “At the end of the day, we’re only as strong abroad as we are at home.”

Hillary Clinton says she and Bill were 'dead broke'

By Jon Greenberg on Tuesday, June 10th, 2014 at 6:18 p.m.
Hillary Clinton is walking the line between being remarkably successful and yet still in touch with the lives of ordinary people. The former secretary of state and potential 2016 presidential candidate has found herself trying to limit blowback to her claim that she and husband Bill were "dead broke" when they left the White House.
She made the comment during an interview with ABC’s Diane Sawyer. Sawyer pressed Clinton on a reported haul of $5 million in speaking fees.
"You have no reason to remember, but we came out of the White House not only dead broke, but in debt," Clinton said. "We had no money when we got there, and we struggled to piece together the resources for mortgages for houses, for Chelsea's education. It was not easy. Bill has worked really hard. And it's been amazing to me. He's worked very hard."
Republicans called the claim laughable and the next day Clinton clarified, again on ABC, that she and Bill had done very well over the past 14 years.
"We have a life experience that is clearly different in very dramatic ways from many Americans," Clinton said. "But we also have gone through some of the same challenges many people have."
We wanted to take a closer look at Clinton’s claim of being "dead broke" when their time in the White House ended after December 2000.
The Clintons’ balance sheet
Clinton’s 2000 Senate financial disclosure form, via the Open Secrets website, provides a rough view of the balance between the couple’s assets and liabilities. These forms only show amounts in broad ranges -- from $15,001 to $50,000, from $50,001 to $100,000 and so forth -- but under any set of assumptions, the Clintons were in the red, a problem driven by Bill Clinton’s enormous legal bills.
Their highest possible assets totaled about $1.8 million, while their lowest possible debts were nearly $2.3 million. The most optimistic scenario left them in a hole of about $500,000.
But the federal disclosure form does not include homes used for personal use and the Clintons owned two. In 1999, they bought a five-bedroom home in Chappaqua, N.Y., for $1.7 million. In December 2000, just as they were leaving the White House, they bought a seven-bedroom house near Embassy Row in Washington, D.C. The price was $2.85 million.
While those homes had mortgages, which would increase the amount of the Clintons' debt, the family also had equity in them. The New York Times reported that the Clintons put $855,000 down on the Washington house, for instance. That equity would have covered the low-end debt estimate of about $500,000.
Point being: Clinton’s 2000 disclosure doesn’t prove the Clintons’ liabilities exceeded their assets when they left the White House.
We reached out to Hillary Clinton’s office for more details and did not hear back.
Were they dead broke?
All this begs the question of whether someone who can afford to buy a $2.85 million house is "dead broke." We reached two accounting professors at Ohio State University’s Fisher College of Business, one of the top-ranked schools in the country. Assistant Professor Jeffrey Hoopes said to call the Clintons dead broke would be a stretch for how the term is commonly understood.
"Almost any president leaving office can expect tens if not hundreds of millions of dollars of future earnings as a result of their having been president," Hoopes said. "Speaking, consulting, board positions, and so on, are all very lucrative."
Professor Brian Mittendorf said a balance sheet of assets and liabilities simply doesn’t paint a complete picture. Mittendorf compared the Clintons to a medical school graduate saddled with huge debts but with the prospect of a very hefty income down the line.
"While one can claim to be technically broke, creditors wouldn't take it as such as long as future income streams could cover the liabilities," Mittendorf said.
In December 2000, at least one large bank saw the Clintons through that lens. Whatever their balance sheet might have been, Citibank lent them $1.995 million to buy that house in Washington, D.C. This was a safe loan. By Feb. 5, 2001, Bill Clinton was commanding regular speaking fees of $125,000 or more.
Hillary Clinton herself did quite well in 2001. The book publisher Simon and Schuster paid her $2.84 million in royalties.
By 2004, the Clintons had erased their debts and Hillary Clinton was ranked the 10th-wealthiest member of the Senate, with a net worth between $10 million and $50 million.
Our ruling
Hillary Clinton said she and Bill were in debt and dead broke when they left the White House. The public record shows that they possibly had more liabilities than assets, but it doesn’t show that conclusively. More important, a balance sheet does not tell the full story and the experts we reached said the Clintons’ earning potential had a real economic value that the financial sector traditionally acknowledges and is willing to bank on.
A few weeks before they left the White House, the Clintons were able to muster a cash down payment of $855,000 and secure a $1.995 million mortgage. This hardly fits the common meaning of "dead broke."
We rate the claim Mostly False.

Can a Campaign Go Bankrupt?

What happens to Hillary Clinton's debt when the primaries are over?


Sen. Hillary Clinton has lent her campaign another $6.4 million since April 1, a staffer confirmed on Wednesday. The Clinton campaign began last month with $10.3 million in unpaid bills to everyone from political consultants to caterers. If a candidate borrows money during the course of a campaign, what happens to all that debt when she drops out or the election's over?
It needs to be paid back—unless the candidate is the one owed the money. Lenders want their money back, and they are expected to follow the same practices they would if they were lending to a business or an individual. (If Clinton had borrowed from a bank, for example, she would be required to pay interest on the loans.) Moreover, under campaign finance law, an uncollected loan from a corporation—whether it's a bank or a sign maker—could be construed as an illegal contribution. As a result, even though vendors don't always require campaigns to pay upfront, they must make a good-faith effort to collect on any money they might be owed.
To pay back those loans, a candidate is forced to do exactly the thing she wasn't able to accomplish during the course of the campaign—raise more money. As long as someone hasn't already given the maximum legal contribution for a given campaign, he or she can—subject to the same campaign finance rules—donate to the effort to pay off debts even after Election Day has come and gone. The long-dead presidential campaigns of Chris Dodd, Bill Richardson, and Rudy Giuliani all have active Web sites inviting contributions to the former candidates' debt-retirement efforts—as long as you haven't donated $2,300 already. For candidates who run for office again, campaign debts can roll over to the next campaign cycle—depending, of course, on the terms of their loans. In perhaps the most famous case of outstanding campaign debt, former Ohio Sen. John Glenn remained nearly $3 million in the hole for more than 20 years after a failed bid for the presidency in 1984. (The Federal Election Commission granted him a reprieve two years ago.)
Debt retirement gets a little more complicated when candidates lend their own money to their campaign. After an election is over, any campaign contributions that go toward repaying the candidate's own loans serve, in practice, as money directly into a politician's pocket. As a result, campaign law (PDF) now limits to $250,000 the amount a campaign committee can repay the candidate after the election. In the case of the Democratic primary, the election will end when a nominee is selected in Denver. So unless Clinton is able to raise enough money to pay herself back by then, she'll have to write off millions of dollars she lent to her campaign.
What happens when a candidate has no hope of raising enough money after the election to pay off his or her outstanding debts? Technically, political committees can declare bankruptcy, but the practice is almost unheard of since defunct campaigns don't have much in the way of assets. Instead, losing candidates who aren't running again for political office—and consequently don't have an easy way to raise much money—may go through a process with the FEC called "debt settlement" (PDF). To do so, a former candidate must agree with creditors on how much he or she will pay back, and the FEC must verify that each creditor extended the debt in the "ordinary course of business" and tried its best to collect. (Unlike outstanding payments to vendors or staff, bank loans typically can't be forgiven.) If debt settlement fails, the FEC can eventually engage in an "administrative termination" that shuts down the campaign committee and cancels its obligations.
Got a question about today's news? Ask the Explainer.
Explainer thanks Jan Baran of Wiley Rein; Joseph Birkenstock of Caplin & Drysdale; and Paul Ryan of the Campaign Legal Center.
Jacob Leibenluft is a writer from Washington, D.C.

Money, Politics and the Undoing of Stan Lee Media

A fund-raiser for Hillary Clinton triggered events that contributed to the Web firm's collapse. In the fallout, several may face prison terms.

July 20, 2003|Michael Cieply and James Bates | Times Staff Writers
In the long, hot summer of 2000, Stephen M. Gordon and his associates wrote big checks by the dozen.
One, for $63,788.48, went to Wolfgang Puck's restaurant Spago, for catering. Another, for $12,800, paid Rogers & Cowan for publicity. Yet another, for $30,048.31, covered a private jet trip for Cher.
The money came from brokerage accounts in the Century City office of Merrill Lynch & Co. and was to fund what became a cornerstone event during the week of the August 2000 Democratic National Convention in Los Angeles -- an A-list Hollywood gala honoring outgoing President Clinton that raised $1 million for First Lady Hillary Rodham Clinton's fledging New York Senate campaign.
Gordon was right-hand man to entrepreneur Peter Paul, who provided the money by borrowing against Merrill Lynch margin accounts secured by more than 1 million shares in Stan Lee Media Inc. Gordon was then Stan Lee Media's executive vice president in charge of operations, and Paul, officially a consultant to the company, was its co-founder.
This was New Economy money: Stan Lee Media had never turned a profit. It had value thanks to the dot-com bubble and the reputation of its namesake chairman, comic book genius Stan Lee.
With startling speed, the money disappeared into the hungry maw of a political venture that was growing more expensive by the minute. Ultimately, the checks written that summer would contribute to Stan Lee Media's collapse and help trigger a sequence of events that may lead to a prison sentence for Gordon.
They also sparked the interest of prosecutors investigating how a young, little-known Los Angeles fund-raiser, Aaron Tonken, now facing criminal charges in a growing scandal, so easily gained access to the highest levels of political power and celebrity.
Paul had hoped to draw attention to Stan Lee Media by funding the Clinton gala. He planned to spend $525,000, but the tab kept soaring. Two weeks before the Aug. 12 fund-raiser -- set to coincide with the Los Angeles convention -- Gordon told Paul that he already had committed $1.3 million.
By Gordon's recollection, Paul, his face "beet red," cornered Hillary Clinton's national finance director, David Rosen, who was organizing the gala from an office in Stan Lee Media's Encino headquarters. In a rage over the mounting costs, "he was swearing at Rosen," Gordon remembered.
Gordon said that Rosen answered: "Guess what, Peter. If you don't come up with the money, we'll just call it off."
Unwilling to pull the plug, Paul and his people kept writing checks, until they totaled more than $2 million -- helping to make for a glittering tribute in Mandeville Canyon that overshadowed other events during the convention.
Three years later, the fallout continues from what turned out to be a perfect storm of ambition, Web-mania and political need.
In recent weeks, federal investigators have expressed interest in reviewing with Tonken the details of his political fund-raising and related matters, said sources familiar with the situation. A protege of Paul, Tonken has said he connected Paul with the Hillary Clinton campaign by calling with an unsolicited offer of support and joined Rosen in helping to launch the August 2000 fund-raiser.
In May of this year, Tonken was charged with mail fraud in connection with his charitable promotions that weren't connected to the political activity. The California attorney general accused him in a civil suit of diverting or failing to account for more than $1.5 million from charitable events such as the "Family Celebration 2001," which was co-sponsored by the Clintons and the cast and crew of the "Ally McBeal" TV show.
Gordon is set to appear in federal court for sentencing Aug. 4. The former Stan Lee Media executive and two associates were convicted in what prosecutors described as a "check-kiting" scheme connected with the company's collapse, which came just months after the Clinton tribute.
Gordon, who plans to appeal his conviction, maintains that he is innocent and is merely a convenient target -- a small part in a much larger scandal. "I know I didn't do anything wrong," Gordon said in an interview.
Paul, who has been in prison in Brazil awaiting extradition, faces trial both in Los Angeles and in New York, where he, Gordon and others have been charged with additional fraud counts connected with the failed media company. Legal representatives for Paul said they expected him to mount a strong defense.
Stan Lee hasn't been charged, and prosecutors haven't leveled claims against anyone connected with the Clinton campaign.
Lee declined to discuss the fund-raiser or Stan Lee Media's collapse. Rosen, who operates a Chicago consulting business called Competence Group, declined several requests to be interviewed. A spokesman in Hillary Clinton's New York Senate office declined to comment.
Court papers, check registers, company documents and interviews with Gordon and others make it clear that Paul's political spending -- much of it prompted by Rosen's threat to pull out of the gala -- helped trigger a meltdown that sent Stan Lee Media into a Chapter 11 bankruptcy proceeding in February 2001 and now is threatening at least half a dozen people with prison terms.
Seeking Attention
As the Internet craze peaked in 1999, Paul joined Lee in launching Stan Lee Media as the platform for a new wave of animated creations that first would be seen on the Web. The comic book icon, now 80 years old, had become the publisher of Marvel Comics in 1972 and was a major force behind Spider-Man, the Incredible Hulk, X-Men and other superhero franchises.
In the heated political season of 2000, Paul saw big-time political giving as a quick way to put the aging Lee back in the spotlight. But neither he nor Lee was playing the game with ready cash. Instead, Paul used borrowed money.
According to Gordon -- who either signed or reviewed most of the checks in his position as Stan Lee's executive vice president in charge of operations -- the $2 million that Paul eventually poured into the Clinton campaign came almost entirely from margin accounts at Merrill Lynch. Investors using margin accounts can borrow as much as 50% of the market value of securities in those accounts.
With the assistance of a local Merrill Lynch manager, Paul maintained margin privileges on a number of accounts at the brokerage firm's Century City office under company names such as Cyberia Inc., World Network Inc. and Hollywood Holdings. Paul's Stan Lee Media shares were scattered among the accounts, allowing the entrepreneur to borrow much more than the $500,000-per-account limit that Merrill's East Coast officials had placed on lending against the Web firm's thinly traded stock.
Tonken has told federal investigators that Paul also transferred Stan Lee Media shares valued at $1.3 million to yet another Merrill Lynch account in Tonken's name, according to notes of an FBI interview with the fund-raiser. Tonken told investigators he spent a substantial amount of his $500,000 in borrowings against those shares on the Clinton gala.
A New York federal grand jury indictment of Paul and Gordon, among others, said Merrill Lynch lost $5 million it had lent to Paul, much of it via checks against the margin accounts. By Gordon's count, about 40% of that amount went to support the Clinton event.
Merrill Lynch froze activity in the accounts in November 2000, according to a sentencing memorandum recently submitted on behalf of Gordon, and checks started bouncing. As described in the memorandum, word quickly spread through the investment community that Stan Lee Media was out of cash, leading to a plunge in its stock price. That triggered margin calls in investor accounts, causing rapid stock sales and still lower prices.
Soon, the stock had dropped low enough to invalidate an agreement under which the company was to have received $40 million in badly needed capital and credit, undermining its viability. The returned checks figured in the kiting charges later leveled against Gordon and others. Stan Lee Media ultimately was shuttered.
Although Paul complained about having been pressed for contributions -- and filed a now-dismissed lawsuit against the Clintons -- it was Merrill Lynch that was stuck paying for most of the gala when loans on the Stan Lee Media stock went bad.
A Merrill Lynch spokesman said the company received $4 million in default judgments against various Paul companies but has collected no money. "Merrill Lynch was victimized in this matter and has cooperated fully with all the law enforcement agencies that have pursued this case," the spokesman said.
$100,000 Request
One of the more intriguing exchanges between Stan Lee Media and the Clinton camp took place in August 2000: When the company's stock still was riding fairly high, Rosen faxed Gordon detailed instructions for the transfer of $100,000 worth of company shares to the Working Families Party. The party had agreed to support Hillary Clinton under New York's system of "fusion" voting, which permits a candidate to appear on the ballot for more than one party.
The request, first made Aug. 3, was repeated Aug. 24, apparently because the funds hadn't been sent. The second fax came nine days after the Clinton campaign made a public show of returning a $2,000 personal contribution from Paul in the wake of a Washington Post report that the entrepreneur had previous convictions for cocaine possession and other felonies.
Gordon said in an interview that he instructed Merrill Lynch to transfer 5,000 shares, or half the requested amount, given the stock's roughly $10-a-share price at the time, from one of Paul's accounts. A handwritten notation on the Aug. 24 fax reads "DONE 5,000."
Robin Epstein, a spokeswoman for the Working Families Party, said a review of the party's accounts showed that no such shares were ever received. Epstein said she didn't know whether Rosen had discussed channeling a contribution from Paul to the party, why an unusual transfer of stock from a highflying Internet company was contemplated or how Clinton's finance director acquired detailed information about the Working Family brokerage account at Morgan Stanley.
If the requested $100,000 gift had been made, it would have matched a $100,000 donation that, Gordon said, initially got Paul "in the door" with the Clintons.
By Gordon's account, Paul was the donor behind the company's July 31, 2000, contribution of $100,000 to the New York Senate 2000 Committee -- a "soft money" fund operated by Clinton, the New York state Democratic Party and the Democratic Senatorial Campaign Committee.
As reported to the Federal Elections Commission, the Senate 2000 gift came from Stan Lee Media; but Paul repaid the full amount to the Web firm from one of his Merrill Lynch accounts, Gordon said. A government exhibit submitted in Gordon's trial showed a Nov. 6, 2000, Merrill Lynch check for $100,000 from one of Paul's companies to Stan Lee, who in turn paid that amount to the Stan Lee Media company on that day.
ome Glitter Fades
Despite its apparent glitter, the Clinton gala wasn't a complete success. The event did raise more than $1 million for Hillary Clinton's campaign, in which she defeated Republican Rick Lazio to become New York's junior senator. But it cost about twice that amount to throw the party. Many prime seats at the event's exclusive dinner finale, priced at $25,000 each, were given away, Gordon said, many to Hollywood stars such as Brad Pitt, Jennifer Aniston and John Travolta.
By Gordon's count, only about 40 of 100 dinner seats were paid for, leaving Paul angry about the high number of "freebies," who drove up the cost of the event without boosting the contribution total.
Still, Paul had put Stan Lee Media on the map -- for a few days, at any rate.
By the next week, Paul's criminal past had been made public, the politicians had moved on and the deepening legal hang-over for Gordon, Paul and others had set in.
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