Clinton, Inc.: The Audacious Rebuilding of a Political Machine

by Daniel Halper

  Freeh was in office during a terrorist attack on the Khobar Towers in Saudi Arabia on June 25, 1996. The towers had been used as a housing installation for members of the U.S. armed forces. The blast killed nearly twenty members of the U.S. forces and injured close to five hundred. It was a massive explosion—a sign, especially in hindsight, of the threat terrorists posed to Americans and what would consume American foreign policy for the next decade and a half.

  At a meeting with surviving spouses while investigating the disaster, Freeh was asked by a wife of a fallen airman “to promise me to my face, and use my name . . . that you will pursue this until you catch the people” responsible for the terrorism. Freeh promised the group that day that he would pursue justice. But, he explained, he would be facing difficulties: The suspects were being held by the Saudi government, and the Saudis were refusing to let U.S. investigators interview them directly. He needed the help of the president of the United States. He needed the commander in chief to intervene and impress upon the Saudis how important it was that these terrorists be brought in for killing Americans.

  Determined to keep his promise to the grieving widow, Freeh later met with Prince Bandar, Saudi Arabia’s then ambassador to the United States. In the 1990s, despite his nervous breakdown, Bandar was an institution in Washington—popular, powerful, and long serving.

  “They had some suspects, but the FBI wasn’t allowed to interrogate them directly, they had to submit the questions to the Saudi investigation unit or something like that. It was annoying and they needed permission from somebody high up in Saudi Arabia for the FBI to directly talk to these people or the suspects,” says a source familiar with the situation. “It was important to Freeh that he get [Saudi crown prince Abdullah’s] permission to allow the FBI to interrogate the suspects in the bombing.”

  Bandar told Freeh that the Saudis would give Americans access to the suspects “if Clinton will ask” the crown prince, who was scheduled to visit Washington soon. “I will warn the prince that Clinton is going to,” Bandar said, “if you can set up Clinton.” It was up to the heads of the two states to work it out in person.

  After his conversation with Prince Bandar, Freeh asked Clinton to request access to the Khobar Towers suspects, and Clinton said he would. Freeh had made the request to National Security Advisor Sandy Berger, who made assurances to Freeh that his request would be granted.

  So after a meeting between Clinton and Abdullah, Freeh went over to Bandar’s posh house in McLean, Virginia, to follow up on the conversation that was supposed to have taken place between Clinton and the Saudi crown prince. Freeh also wanted to thank the Saudi crown prince, through Bandar, for helping to make sure that the Arab nation would help the Americans in their terror investigation.

  But “it didn’t seem to work and he didn’t know why,” a source close to Freeh explains. The Saudis had decided not to let the Americans in. And Freeh couldn’t understand why. He thought he had done everything by the book—and that he had covered his bases by setting up both sides, the Americans, through Clinton, and the Saudis, through their ambassador. The request at that point would only be a formality, one that he had been assured would be granted when Clinton asked.

  Bandar thanked Freeh for coming by and after chatting for a bit, walked the soon-to-be-outgoing FBI director to the door and then to his awaiting mini-motorcade.

  Bandar followed him out and stopped him on the steps.

  “I have to be honest with you,” Bandar confessed to Freeh. “Um, Clinton never mentioned it.” He hadn’t said a word about the Khobar Towers bombing.

  A source says, “Clinton raised the subject only to tell the crown prince that he understood the Saudis’ reluctance to cooperate, and then he hit Abdullah up for a contribution to the Clinton Presidential Library.”

  Ten years after the bombings, in 2006, Freeh would out President Clinton in a signed Wall Street Journal opinion article—an uncommon act of indiscretion for a former FBI director, but a man clearly outraged by the president’s handling of the entire situation. Freeh wrote, “The 19 Americans murdered were members of the 4404th Wing, who were risking their lives to enforce the no-fly zone over southern Iraq. This was a U.N.-mandated mission after the 1991 Gulf War to stop Saddam Hussein from killing his Shiite people. The Khobar victims, along with the courageous families and friends who will mourn them this weekend in Washington, deserve our respect and honor. More importantly, they must be remembered, because American justice has still been denied.”30

  The subtext of the op-ed was clear. The Clinton administration had its chance to help. And they blew it. Why? Because Bill Clinton would rather have used his opportunity with the head of Saudi Arabia to help his own cause and not the cause of bringing to justice in America the Iranian terrorists being held by the Saudis in conjunction with the terror attack. (Clinton has denied Freeh’s version of events.)

  Well, the Saudis did give. Eight years later it would be revealed that they had given quite generously. “The royal family of Saudi Arabia gave the Clinton facility in Little Rock about $10 million,” the Washington Post would report.31 It went toward the building of the Clinton Presidential Library in Little Rock, Arkansas. “In addition, a handful of Middle Eastern business executives and officials also gave at least $1 million each, according to the interviews. They include Saudi businessmen Abdullah al-Dabbagh, Nasser al-Rashid and Walid Juffali, as well as Issam Fares, a U.S. citizen who previously served as deputy prime minister of Lebanon. Spokesmen for Kuwait and Taiwan confirmed that each government has given the library $1 million.”32

  Clinton saw the generosity from abroad as support for him personally. “As president, he was beloved around the world, so it should come as no surprise that there has been an outpouring of financial support from around the world to sustain his post-presidential work,” a statement from the William J. Clinton Foundation would read, defending the foreign donations to the $165 million project.33

  He was “beloved” then, too, by the family of Marc Rich, which gave him $450,000—before the president pardoned the criminal financier on his way out of office.

  This isn’t the only anecdote that shows the Clintons were interested in, even obsessed with, money.

  The Clintons’ hunt for money had led to other scandals. In the president’s first term, for example, he accepted $450,000 in contributions to his legal defense fund that were solicited by Little Rock restaurateur Charlie Trie. Suspecting that the money was illegally coming from China, the Democratic National Committee hired a private investigator, Terry Lenzner, to determine the true source of the funds.

  According to Lenzner, “red flags were obvious. For example, the money orders had different names on them, but the word ‘presidential’ was misspelled on all of them—in the exact same way and in the same handwriting.” Lenzner discovered that, in an attempt to hide the true source of the funds, many sizable contributions had been made in the name of people who in reality were highly unlikely, and even unable, to contribute large amounts of money. Many made only between $20,000 and $30,000 a year.34

  Lenzner recommended returning the contributions, and the DNC agreed. Bill Clinton, however, didn’t. Only after the former attorney general and the Catholic priest who cochaired his legal defense fund threatened to resign did Clinton begrudgingly agree to give back the (probably illegal) contributions.

  During his presidency, Clinton largely emerged from these scandals, perhaps because there were so many others. But his financial dealings would finally come to haunt him—in a big way—on his last day in office.

  In an interview for this book, Ari Fleischer remembers the outgoing president’s notorious difficulties with time management and basic courtesy. “On Inauguration Day 2001, President-elect Bush was at a ceremony at the small church across the street from the White House,” Bush’s incoming press secretary recalled. “It is a beautiful old yellow church, the other side of Lafayette Park. At any rate, he was scheduled to be there for the morning service, and the
n we were going to leave the church and go straight to the White House for the ceremonial coffee with the president and the vice president, and then the president, vice president, president-elect, and vice president–elect would travel in four motorcades up to Capitol Hill for the swearing in of the new president, President Bush. As we were leaving the church, our advance people came to us, kind of sheepishly, and said, ‘You have to hold, Mr. President-elect.’ ”

  Bush, who was both punctual and notoriously impatient, seemed surprised. “Why do we have to hold?” The party was told that Bill Clinton was running behind schedule. On inauguration morning, he just couldn’t seem to leave the Oval Office he loved. One need not have been present that day to guess the new president’s reaction as he sat and waited.

  “What it turned out to be, later, as I was told, was he was busy signing the pardons that he had issued in his last hours of the presidency,” Fleischer tells me. “That is just one anecdote about life with President Clinton.”

  Of particular note that day was Clinton’s last-minute pardon of Marc Rich, a wealthy financier and oil trader whose customers, clients, and sellers included Fidel Castro, Muammar Qaddafi, and Ayatollah Khomeini. Rich was facing a possible 325 years in prison. He illegally traded with the ayatollah while Iran was holding American hostages, and he was later indicted in the biggest tax evasion case in history, owing $48 million to the U.S. government in back taxes. After he fled to Switzerland, Rich was put on the FBI’s Ten Most Wanted list.

  Rich was pardoned only after his ex-wife, Denise Rich, an attractive middle-aged Austrian with big blond-highlighted hair, donated $100,000 to Hillary Clinton’s 2000 New York Senate campaign, $450,000 to the Clinton Library, and $1 million to the Democratic Party. Later, Ms. Rich would invoke the Fifth Amendment when called to testify before the House Government Oversight Committee on her role in the pardon scandal. The donations were likely a prominent reason that Bill decided to approve the pardons. But there was also pressure being applied by the Israelis (Rich had long been an intelligence source for Israel). Since Clinton was still reluctant to release convicted spy Jonathan Pollard, even under the threat of leaking the Lewinsky tapes, might Rich have been their consolation prize?

  The fracas over the pardons made a lifelong enemy of Eric Holder. Before he assumed his eventual role as attorney general to Barack Obama, Judge Holder was no one’s idea of an ideological lightning rod. In the 1980s he had been appointed to the Superior Court of the District of Columbia by President Ronald Reagan. A lifelong public servant, Holder had worked his way up the Justice Department ladder, starting off as an assistant U.S. attorney, before becoming deputy to the powerful attorney general Janet Reno. (Former colleagues of Reno at the Justice Department tell me that her health has declined to the point that she no longer talks to the press.) Inside the Clinton Justice Department, his motivations tended to be more pragmatic than ideological. That’s the kind of guy the Clintons liked.

  In 2001, the ambitious Holder was on the receiving end of a deal with the Clintons. It was the kind of deal Holder could not refuse. And that’s mainly because he realized what had been struck only after it was too late.

  Just as things were winding down for the administration, White House officials made arrangements for Holder to ride with the president aboard Air Force One. This was a big deal—a rare treat for anyone, especially a government bureaucrat below a cabinet-level position and not in the White House. Holder of course was thrilled.

  Finally, Holder thought, President Clinton was showing him the respect his many years of service had rightfully earned the middle-aged lawyer with familial roots in Barbados. He flew halfway across the country and rather enjoyed it. With Gore’s loss, he wasn’t going to realize his personal goal of being the nation’s first black attorney general, at least not yet. But maybe, Holder hoped, he would get his chance the next time around—when a Democrat returned to the White House. Maybe that’s what this trip was about—to burnish a relationship with Clinton for next time around.

  Indeed, Clinton seemed game. At an education event at James Ward Elementary School in Chicago, Clinton went out of his way to introduce his now-honored guest. “I brought the deputy attorney general, Eric Holder, all the way from Washington,” he said. “He had never been on one of these trips for me, and he’s been working like a dog for years, so I asked him to come.” The shout-out was more for the benefit of Holder than the crowd, but they applauded anyway.

  “To continue our school analogy,” Clinton continued, “this is recess for him today.”35 The crowd clapped again.

  Public praise from the president of the United States. And a ride on Air Force One. Holder was thinking to himself that he had finally arrived. But Holder later realized what this was really about. He wasn’t being courted for some role in the distant future. He was being softened up for something Clinton wanted now.

  There had been talk about a possible pardon of financier Marc Rich. But nothing had come of it. That is, until Clinton’s last full day in office, January 19, 2001. Then the president’s White House counsel contacted Holder and asked for his take on the controversial idea. Full of good feeling toward the president, Holder, by his own admission, was unprepared for the call.

  “The full dimension of who this guy was and what he was charged with didn’t come in evidence even after those initial news stories,” Holder later said. “It was not something that ever commanded a lot of my attention while I was there.”36

  Holder was under the impression that the Rich application had been thoroughly vetted within the Justice Department. “It was almost unimaginable to Eric that an unvetted pardon could be under consideration at that late date and time,” a colleague says. But that is in fact what happened.

  Holder told the White House, in words that would come back to haunt him, that he was “neutral, leaning toward favorable” about a pardon in the Rich case.37 Whatever that meant. That was all Clinton needed—he seized upon the “approval” of the Justice Department as one of the factors helping him make his decisions. (The $1 million he received from Denise was, of course, never mentioned.)

  Rich’s was not the only controversial pardon. In 1999, Clinton commuted the sentences of sixteen Puerto Rican terrorists, a move interpreted by some as an attempt to help Hillary’s Senate campaign by pandering to New York’s Puerto Rican voters. Then, in 2000, Clinton pardoned fraudsters Edgar and Vonna Jo Gregory, who were friends of Hillary’s brother Tony Rodham and who may have compensated Rodham with more than $100,000 in loans that were not repaid. Finally, in the last hours before Clinton left office, he commuted the sentence of cocaine trafficker Carlos Vignali and pardoned fraudster Almon Glenn Braswell, who each paid Hillary’s other brother Hugh Rodham $200,000 to argue for their clemency.38

  Though the pardons clearly seemed influenced by her Senate campaign, Hillary and her new spokesman, Howard Wolfson, said the pardon decisions were strictly Bill’s decisions. Because of Monica, it was easier for the public to believe that Hillary was in a completely different orbit.

  The Rich pardon in particular clouded Clinton’s legacy. It was a low point—one even lower than the Lewinsky scandal. “This was an official act that was as sordid as anything he did in four years,” says a high-level former government official. “Probably more so.”

  It wasn’t just Republicans who thought this. The Marc Rich case seemed to finally unleash a pent-up frustration among once-reliable Clinton defenders over his personal ethics and behavior. Feelings they’d contained even during Monica.

  Erstwhile Clinton defenders like MSNBC’s Chris Matthews berated the Clintons for their “pig fest . . . on their way out the door.”39 The columnist Maureen Dowd labeled them “grifters,”40 and the New York Times chided the president for his “outrageous abuse of the pardoning power.”41 The Washington Post remarked on what the newspaper called the “defining characteristic” of Bill and Hillary Clinton: “They have no capacity for embarrassment.”42 Even Democratic stalwart Jimmy Carter called the
pardons “disgraceful.”43 With the Clintons on their way out of the White House, it was finally safe to dump on them.

  Eric Holder never forgave them for making him the fall guy in their latest sordid mess. After receiving a fierce rain of bipartisan criticism during Senate Judiciary Committee hearings, Holder told reporters that he wanted to “crawl into bed and pull the covers up over my head.”44 He believed at the time that his public life was over—all thanks to the Clintons. “Eric hates them,” a former colleague of Holder’s says. But he would get a chance to pay them back.

  2

  On Their Own

  “Those were difficult early years. All everyone cared about was what woman was sitting at a table with him or what he was eating.”

  —senior Clinton aide on Bill’s post-presidential exile

  Freed from the confines of the White House, Bill and Hillary Clinton were unleashed on the world in 2001. Bill left the White House, by many accounts, including his own, with a great sense of reluctance. A feeling that things weren’t finished. That he could have been elected to a third term of office in 2000, if the Constitution had allowed it. That was possible, since his job approval ratings remained high, largely attributable to a seemingly robust economy. A January 2001 poll taken by Gallup days before leaving office showed the president with astonishingly high favorables: 66 percent approved, while a measly 29 percent disapproved.1

  Under the surface, however, the widespread view of Clinton among the general public was negative. He was seen as unethical, amoral, and sleazy. Ari Fleischer, who was entering the White House as press secretary to the newly elected George W. Bush, recalled the public sentiment keenly. “[Clinton] left office with a lot of ill will, and a bit of it was generated by those last-minute pardons that were highly controversial, on his way out,” Fleischer told me in an interview.