Bill Clinton's Continuing Scandals

Last Wednesday's Wall Street Journal featured a fascinating article describing how scandal and smarmy behavior continue to dog former President Bill Clinton.

The story involves Clinton's new right-hand man, Douglas Band, and a wannabe Italian power broker named Raffaello Follieri. It's the sort of thing that comes right out of the old nighttime television soap opera, Dallas.

Essentially, Band, who had climbed up the Clinton staff ladder to become a trusted advisor, befriended Follieri, who was on the make for important American financial and social connections.

Meanwhile, Clinton had taken a lucrative position as a partner in Yucaipa Companies, a California-based investment firm. Since he left office, Clinton has allegedly turned his and his wife's sizable personal debts into a small fortune, thanks to earning $40MM in speaking fees.

Nevertheless, Clinton turned to his partners a Yucaipa to compensate his new key man, Mr. Band, so that the latter would not take offers to return to the business world. Arrangements were made for Yucaipa to direct various payments to Band in exchange for continuing to remain as Clinton's key staffer.

Such proximity to the former President helped Band in other ways, as well. Mr. Follieri used his growing friendship with Mr. Band to secure financing from a partnership formed by Yucaipa, via Bill Clinton, to help him buy Catholic Church properties and redevelop them for commercial uses.

The Yucaipa partnership, via Ron Burkle, one of its partners, invested $100MM with Mr. Follieri's venture. Another Clinton pal, Mr. Michael Cooper, advanced more money to Follieri, allegedly causing the latter to pay Mr. Band $400,000 for his efforts in making this connection bear fruit.

It seems, though, that Mr. Follieri focused more energy and money on his offices, than on actually executing the business plan which attracted the Yucaipa funding. Somewhat cynically, Follieri had promised that the US Catholic Church, in order to pay its mounting legal bills and settlements for various transgressions by its priests, would be selling real estate to raise that cash. Follieri presented himself as having key relationships which would give him an inside track to buying and developing these properties.

However, first, Follieri secured expensive offices on Fifth Avenue in New York, as well as a penthouse space in the same building. Shortly thereafter, he moved into the penthouse. Other lavish expenses triggered a lawsuit by Mr. Burkle for misappropriation of funds from Yucaipa.

Meanwhile, Follieri used his contacts, via Mr. Band, to try to establish business ties with former Brazilian President Cardozo, as well as Mexican tycoon Carlos Slim.

Back in the original US business foray, Follieri's group did manage to buy about $50MM worth of properties near Chicago and Philadelphia. However, the pace of the purchases, and interactions with Messrs. Cooper and Burkle did not go well.

Overlaid on this, of course, is a muddle involving Follieri and Hillary Clinton's campaign. Follieri alleges that Hillary's campaign staff requested his help to woo Catholic voters, while the staffers counter that Follieri offered his help to them.

Either way, the entire mess seems to be par for the course for Slick Willy. Follieri approached him for entree to partners with more money for investments. In exchange for buying access via Clinton's key aide, Mr. Band, Follieri came away with more than $100MM from a partnership formed by Clinton's new business base. Then things fell apart, and Clinton's partners are suing the young Italian who had suddenly become part of Clinton's expanded circle of international contacts.

Pictures of Follieri and his significant other, actress Anne Hathaway, with the Clintons, are now explained with that familiar 'he gets his picture taken with lots of people whom he really doesn't know' line.

Somehow, you get the feeling that Clinton and his minions did a lot less sniffing around Follieri's past dealings than the Journal's reporters did. They carefully avoid libel, but leave the distinct impression that Follieri is an Italian on the make in the US, puffing up his prior business accomplishments, and running a very agreeable-sounding sort of con game to shake tens of millions of investment capital from gullible American financiers.

Some things don't seem to change. I saw Maria Bartiromo of CNBC interviewing Clinton last week, I suppose in connection with his big 'Clinton Global Initiative' meeting in New York. Why she, or her network, thinks Bill Clinton has the experience or background to opine on any business matter, such as the recent mortgage market meltdown, is beyond me.

It seems that scandal, losses, and shady business dealings seem to cling to Bill Clinton even now, eight years after his rather scandalous departure from the White House.