Hillary was popping over to Bogotá from nearby Ecuador aboard a US government plane. After her aircraft touched down at Colombia’s Catam Military Airport, she was greeted by US ambassador William Brownfield and Colombian foreign minister Jaime Bermudez. Hillary expressed her strong support for the Uribe government and closer ties with Colombia. “The United States will continue to support the Colombian people, the Colombian military and their government in the ongoing struggle against the insurgents, the guerrillas, the narco-traffickers who would wish to turn the clock back,” she said.4
These were not meaningless niceties. Only a couple of months earlier, three influential Democratic senators—who were also Hillary’s friends—had written to her about cutting aid to Colombia. Russ Feingold of Wisconsin, Chris Dodd of Connecticut, and Patrick Leahy of Vermont had penned a letter saying it was time to back away. “Given U.S. record budget deficits, we cannot afford to continue assistance that is not achieving sufficient results,” they wrote. They also dinged Uribe on human rights. “In particular,” they said, “human rights abuses by Colombian military personnel supported by the U.S. continue, and those responsible are rarely brought to justice.”5
Nor were they alone. Foreign aid for Colombia was never a popular subject among Democrats, who were worried about human rights and labor rights conditions in the country.6
From the airport Hillary headed into Bogotá and met Bill at a restaurant in the northern part of the city. With a few friends (it is unclear if Giustra was also there) they enjoyed cappuccinos and a steak dinner.
The next morning, June 9, Bill headed to Casa de Nariño, the presidential palace, for a quiet meeting with President Uribe. They met for approximately an hour and had what the media called an “animated dialogue.”7
Bill left Casa de Nariño before noon. Hillary arrived for lunch with the president, after which they signed a series of science and technology agreements. Most importantly for Uribe, Hillary also lent her vocal support to a trade agreement between the United States and Colombia. “First, let me underscore President Obama’s and my commitment to the Free Trade Agreement,” she told RCN Television. “We are going to continue to work to obtain the votes in the Congress to be able to pass it. We think it’s strongly in the interests of both Colombia and the United States. And I return very invigorated . . . to begin a very intensive effort to try to obtain the votes to get the Free Trade Agreement finally ratified.”8
Uribe could not have been more pleased. It is also worth noting that her support for this agreement represented a complete reversal of her position—and Obama’s—from the 2008 campaign.
Days after Hillary left Bogotá, Prima Colombia Properties, which Frank Giustra has ownership interest in through a shell company called Flagship Industries, announced that it had acquired the right to cut timber in a biologically diverse forest on the pristine Colombian shoreline. The International Tropical Timber Organization (ITTO) calls this property “one of the world’s largest untapped hardwood timber supplies.”9 Through its Colombia-domiciled subsidiary REM International CISA, Prima entered into an exclusive agreement with the Colombian government giving it the right to “harvest 1,050,000 cubic meters of hardwood” on the west coast of Colombia.10 The timber would be cut along picturesque Huaca Beach in Choco and shipped to China.11
Days later, Pacific Rubiales Energy, a company for which Giustra was the Canadian face, announced that the Uribe government was giving the company the right to drill for oil on six lucrative plots.12 Pacific Rubiales acquired the largest exploration acreage in the Putumayo Basin, which sits at the center of Colombia’s oil belt. The other plots were in the giant reserves east of Ciusiana-Cupiagua, and three blocks in the Llanos Basin, a prolific oil-rich area at the foot of the Andes mountains.
It was a stunning success, given that Pacific Rubiales was a relatively new company with little track record in the country. But these lucrative concessions helped the company grow quickly. As German Hernandez, who oversees business operations for the company, explained in 2011, “[A few years ago] we were fewer than 20 people, practically living in tents with mosquito netting. . . . Today we are the number one project in the petroleum industry in Colombia.”13 By the end of 2010 the company was producing a net of seventy thousand barrels of oil equivalent per day in Colombia, and boasted a market cap of over $8.3 billion.14
According to Pacific Rubiales cochairman Serafino Iacono, Giustra’s role at the company is to provide “valuable financial capital and political capital [emphasis added] along the way.”15
Pacific Rubiales signed up as an early contributor to the Clinton Foundation.16 Pacific Rubiales and underwriters contributed over $4 million to the Clinton Giustra Sustainable Growth Initiative (CGSGI).17 And as we have seen in several other cases, the company’s decision to give to a charity thousands of miles away to fund work in Colombia struck local charities as odd. They, along with labor-backed social welfare organizations, had been clamoring for the company to provide donations for several health and welfare initiatives. They also wanted the company to raise the salaries of employees. These efforts were rebuffed. Instead of flowing to local charities, the bulk of the company’s charitable contributions were given to the Clinton Foundation.18
Pacific Rubiales, despite its announced commitment, does not appear on the Clinton Foundation list of donors. Repeated phone calls and e-mails to Pacific Rubiales to determine whether it honored their commitment have not been returned as of this writing.
Giustra’s run of good business news in the summer of 2010 was not finished. Less than two weeks after Hillary left, yet another of Giustra’s companies, Petroamerica, announced that Colombian regulators had designated the company a “restricted operator,” which meant it was eligible to explore for and produce oil.19 Petroamerica had been founded only a few months earlier, in late 2009, by what a Canadian business journal called “a group of part-time managers and directors.”20 Now, courtesy of the Uribe government, it was sitting on some very big prospects in Colombia. “Of all the resource projects that I am involved with, this is the one I am most excited about,” Giustra told one business publication.21
The Clinton Foundation was integrated into US State Department energy initiatives in Colombia. According to a leaked State Department memo, on November 8, 2009, a US government delegation arrived in Colombia to explore the rapid expansion of energy and mining loans backed by the US government in Colombia. “The energy sector in Colombia has big plans to expand and the Export-Import Bank (ExIm) and the U.S. Trade Development Agency (TDA) want to be a part of this expansion by providing financial backing and trade capacity building assistance.” When TDA representative Patricia Arriagada arrived in Colombia, she met with mines and energy minister Silvana Giaimo. According to a leaked State Department cable, in that meeting Arriagada was “accompanied by Manuel Olivera, local director of the Clinton Foundation.”22 The memo mentions no other nonprofit organization involved in these discussions.
As a result of that delegation, the US government expanded energy and mining loans in Colombia.23 One of the big projects funded by the US Export-Import Bank was a $280 million liquid natural gas (LNG) barge that was to be used to transport LNG from Colombia to China. The barge was being built for Giustra’s company, Pacific Rubiales.24
Giustra had other projects in Latin America that received US taxpayer money. Giustra’s Endeavour Mining arranged for Export-Import funding in September 2010 as part of an $858 million package of loans for a copper mining project in Mexico called Baja Mining.25 (According to an Endeavour PowerPoint marketing presentation, it “closed” the deal.) The project involved developing an underground copper-zinc mine near the Mexican town of Santa Rosalia. Endeavour was an adviser on the deal, but Baja Mining was also a “core investment” for the firm, according to one investment document.26 US taxpayers were on the hook for approximately $420 million.27
The Baja investment didn’t go well—at least for American taxpayers. According to the Office of the In
spector General at the Export-Import Bank, the project was plagued with cost overruns. The report also suggested that “corporate malfeasance” had taken place. As the report put it, “Our inspection revealed evidence of inappropriate conduct by several parties including the Borrower’s failure to make timely disclosure of significant cost overruns, inaccurate representations, allegations of fraud related to one of the project’s local vendors, management impropriety, and an over-arching lack of governance.” The report noted further that the Export-Import Bank had failed to perform proper due diligence when approving the deal. The project apparently fell into default within six months of financial closing.28
The full extent of taxpayer funds spent and US government power exerted that helped Giustra cannot be fully known. In Colombia, as in other countries, he uses a web of companies, shell companies, foreign affiliates, and offshore entities that make tracking his investments extremely difficult. In addition to the investments mentioned in this chapter, he also controls a private company called Blue Pacific, which “owns ports under construction in Cartagena and Barranquilla, as well as power plants, farms, mines, and other infrastructure assets” in Colombia.29
Colombia had long been a focus of interest for the Clintons. During his presidency, Bill won praise from the Colombians for pouring aid into the country to fight both drug cartels and a revolutionary insurgency. In 2000 he had initiated Plan Colombia, an ambitious program to escalate the war on drugs that came with more than $1.3 billion in aid.30
Once he was out of office, his attention shifted from the war on drugs to Colombia’s ambitions to sign a free-trade agreement with the United States. The Colombian government wanted a free-trade agreement so that it could sell its products, including natural resources, in the US market tariff free. President George W. Bush and Republicans in Congress generally favored the deal. Opposition mostly came from Democrats (and organized labor) who felt the move would hurt wages for US workers. Democrats also argued that Colombia’s human rights record was poor.31
For Colombians themselves, it was clear that, as the leading Colombian newspaper, El Pais, put it in 2006, “The support of Senator Hillary Clinton and her husband, former President Bill Clinton, will be decisive.”32
The story began, as it often does, with a lucrative speech. In June 2005 a South American business group called Gold Service International offered Bill $800,000 to deliver four speeches in South America. Gold Service was a keen supporter of the proposed US-Colombia free-trade agreement, because it would boost Colombian exports to the United States.
This was a lot of money at that time. Though Bill’s fee would go up appreciably when his wife became secretary of state, his average payment through 2010 was $150,000.
Giustra loaned Bill his jet, and Bill made stops in Mexico City and Bogotá, and then gave two speeches in São Paulo, Brazil.33 As Andres Franco, the group’s chief operating officer, explained, “he was supportive of the trade agreement at the time that he came.” And Bill spoke openly about his support for it.34
Meanwhile, Bill made efforts to bring Giustra and Uribe together so that the Canadian investor could expand his operations in Colombia. Thus, in September 2005 Bill hosted a “philanthropic event” with Uribe. And as he often did, he mixed philanthropy with business. According to the Wall Street Journal, the purpose of the meeting was to introduce the two men. As the Journal reported, Uribe and Giustra “put up two chairs in a hallway and talked for about ten minutes. . . . Later in the day, a top Clinton aide told Mr. Giustra that he heard the meeting with Mr. Uribe went well.”35
In January 2007 Giustra’s new company, Pacific Rubiales, signed a pipeline deal with Ecopetrol, the state-owned Colombian energy company. One month after the deal was sealed, Bill, Giustra, and Uribe met at the Clintons’ home in Chappaqua, New York. In March, they met again, this time in the Colombian port city of Cartagena.36
All along, Democrats remained opposed to military assistance to Colombia as well as the Colombian free-trade agreement.37 But Senator Hillary Clinton’s views on the matter remained ambiguous. As one Latin American financial publication put it, when it came to her positions on trade “we find a bit of everything.” She was in favor of the North American Free Trade Agreement (NAFTA) and supported trade deals with Chile, Peru, and Singapore. But she was against the Central American Free Trade Agreement and extending trade preferences with other South American countries.38
So the Colombians continued their courtship by various means.
In June 2007 President Uribe arrived in New York City to headline a dinner event at a posh hotel. The event was titled “Colombia Is Passion.” In fact, the night was largely about Bill. Uribe presented him with the “Colombia Is Passion” award for “believing in our country and encouraging others to do the same.”39
As Newsweek reported,
Eager to repair its image in the United States and help boost support for a controversial United States-Colombia free-trade agreement, the beleaguered government of Alvaro Uribe came up with a clever PR move: give Clinton an award at a banquet, where the popular former president would say nice things about the country.
The dinner included a video depicting Bill as a Colombian hero. Uribe even praised him as the country’s unofficial minister of tourism. Bill praised Uribe in turn and declared that, while there was currently a debate in Washington about the free-trade agreement, “[w]e need to remember that we are friends.”40 Then he invited Uribe to be a “featured attendee” at the annual Clinton Global Initiative meeting in New York that September.
As it happens, publicity for the awards ceremony had been handled by Burson-Marsteller Worldwide, a PR firm then headed by Mark Penn, a longtime political adviser and pollster for the Clintons.41 Penn, who was also serving as Hillary’s campaign manager for the 2008 run, was advising the Colombians on how to get the free-trade deal through Congress. Uribe paid Penn’s firm $300,000.42
Penn’s ties to the Colombians proved too embarrassing and he resigned as Hillary’s campaign manager. For good measure, the Colombians let Burson go, too.43
Also on the Colombian payroll was Hillary’s campaign spokesman Howard Wolfson’s lobbying firm, Glover Park. The firm was paid $40,000 a month. While Wolfson didn’t work directly on the Colombia account, he did have an equity stake in the firm.44
The trade deal and Penn’s consulting arrangement soon became issues in the Democratic primary. Courting the labor vote, Barack Obama had come out strongly against a free-trade deal with Colombia. So did Hillary. In the sort of overheated rhetoric we often hear on the campaign trail, she was uncompromising. “As I have said for months, I oppose the deal. I have spoken out against the deal, I will vote against the deal, and I will do everything I can to urge the Congress to reject the Colombia Free Trade Agreement.”45
Uribe, sensing the trade pact was imperiled by American politics, lashed out at Obama—but not at Hillary. “I deplore the fact that Senator Obama, aspiring to be president of the United States, should be unaware of Colombia’s efforts,” he said. “I think it is for political calculations that he is making a statement that does not correspond to Colombia’s reality.”46
Given that both Hillary and Obama were publicly opposed to the trade deal, either way it looked ominous for Uribe. As one economic consultancy put it, “we are concerned that a Democrat win of the presidency may stymie the FTA for even longer.”47
Obama, of course, went on to win the nomination and the presidency. And Hillary, as his newly minted secretary of state, was quick to change course on the trade pact. In early 2009, while the Obama administration was reportedly still figuring out its trade policy, Hillary let Uribe know she was “very proud to be working with Colombia” on the trade deal. As Colombian foreign minister Jaime Bermudez Merizalde told the BBC after he met with Hillary in February 2009, “What we talked about was that we have to work together to see how this issue can be handled in Congress.”48
Hillary had come out swinging in favor of the trade pact when she
met with Uribe shortly after Bill in June 2010. By early 2011 she was helping lead the effort to pass the deal. “There are still negotiations that are taking place,” she told reporters after meeting with Colombian vice president Angelino Garzon. “We don’t want to send an agreement just for the sake of sending an agreement. We want to send an agreement and get it passed.”
“Secretary Clinton’s remarks represent the clearest signal the administration has sent with respect to its intentions to move the Colombia agreement forward in a specific time frame,” said National Foreign Trade Council president Bill Reinsch.49
It did not go unnoticed that this represented a complete policy reversal on Hillary’s part. She justified the shift on the grounds that the human rights and labor situation in Colombia had improved. Hillary claimed in a press conference that “[w]e have seen improvements in the human rights situations in a number of countries,” and cited Colombia, among others.
But Hillary’s words concerning labor union conditions contradicted her own department’s most recent human rights report.50 The number of trade unionists killed had actually gone up in 2010.51
Hillary also claimed that the trade agreement was now a good deal for everyone. “The U.S.-Colombia Free Trade Agreement would allow our businesses to sell goods in Colombia duty-free—the same way Colombian goods have entered the United States for many years—and it comes with important new guarantees on labor and human rights.”52
That view was not shared by the AFL-CIO, which declared in 2011, “Colombia remains the most dangerous place in the world for union members.”53 Human Rights Watch reported that there had been “virtually no progress” since 2006 in obtaining convictions for union violence, and the press cited thirty-eight recent murders of trade unionists in the few months after Colombian elections in 2010.
Clinton Cash: The Untold Story of How and Why Foreign Governments and Businesses Helped Make Bill and Hillary Rich Page 14