Bill Clinton offered this earnest wish to backers of Accoona, a new search engine, when he spoke at its debut reception three years ago: "I hope you all make lots of money."
Sadly, for Accoona, the former president's wish has so far gone unfulfilled.
Accoona, which turns out to have an unusual set of investors, has yet to turn a profit.
But Clinton has. He parlayed stock options in the company into a $700,000 payday for his charitable foundation. That's $700,000 more than another celebrity engaged by Accoona has realized for his options.
Here's the story of what happened:
By Andrew Zajac
In December 2004, former President Bill Clinton made a much-publicized appearance at a launch party in New York for Accoona, a new Internet search engine billing itself as a rival to Google.
Clinton's presence at the gathering at Tavern on the Green in Central Park was a coup for the unheralded, privately held Accoona, which paid for the former president's appearance by issuing options for 200,000 shares of stock to Clinton's charity, the William J. Clinton Foundation. In 2006, the Clinton Foundation sold the shares for $700,000.
Another celebrity hired by Accoona, Russian chess grandmaster Garry Kasparov, did not fare as well. Kasparov also was paid in stock options, but his agent said he has not exercised them because his financial advisers told him last year that the shares were worth less than their $1 option exercise price.
The Clinton Foundation's good fortune with Accoona stock is among several lucrative transactions involving the former president's personal and charitable finances. Since leaving office in 2001, Clinton has wiped out millions of dollars in legal bills and become a multi-millionaire through a brisk schedule of speechmaking and book-writing, as well as a pair of consulting and investing agreements that have yielded as-yet-undisclosed sums.
Clinton also raised more than $362 million for his foundation through 2006 and secured pledges for billions more.
Interest in Clinton's financial dealings has intensified since Hillary Clinton lent her presidential campaign $5 million in January. She has been asked in nationally televised debates whether she would disclose tax returns or persuade the former president to release information about his charitable pursuits.
But evaluating the transactions is difficult because both Clintons, while complying with legal filing requirements, have somewhat limited disclosure of their finances.
See the rest of the story in today's Tribune:
With respect to the Accoona stock, for example, Clinton's foundation reported the sale of shares for $700,000 on its 2006 IRS-mandated financial statement for tax-exempt organizations. But the foundation was not legally required to report the initial receipt of Accoona shares, and it did not do so.
The foundation also declined to disclose to whom it sold the stock. "The foundation sold its shares through a broker in 2006," Clinton Foundation spokesman Ben Yarrow said in an e-mail.
Accoona's chief financial officer, William Rose, also declined to disclose the buyer or to give the stock's current value. Accoona did not buy back the stock and the buyer had no connection to his firm "that I'm aware of," Rose said Monday.
Valuing shares in privately held start-ups can be difficult because they often don't have an earnings track record and the price sometimes is pegged to the hope of future earnings based on announcements of promising partnerships or technology.
Speaking generally, James Schrager, a professor of entrepreneurship at the University of Chicago Graduate School of Business, said, "When you have a political figure involved, many times the terms are arranged in advance."
The $700,000 the Clinton Foundation received for its stock is more than four times the $150,000 Clinton typically commands for appearances in the New York area. The amount startled Kasparov's agent, Owen Williams, who said he regrets not setting different terms for his client's appearance.
Williams declined to say how many options Kasparov received but said the chess champion and one-time Russian presidential candidate was advised last year that exercising them "was not a good expenditure of Garry's money. ... Our financial guy said, `You will not make money buying those shares at $1.' ... He didn't exercise his options."
The markets seemed to agree. Twice in the last year, Accoona filed, and subsequently withdrew, plans for a public offering, once on London's AIM market and more recently in the U.S. on the NASDAQ exchange.
Accoona's prospectus for its aborted U.S. offering pointed to some of its difficulties. The company never had made a profit; a co-founder and major shareholder had pleaded guilty to a felony fraud charge; and Accoona's key partner is a media company controlled by the Chinese government, which often is criticized for censoring the Internet.
There is nothing illegal or improper about former presidents making paid appearances. Jimmy Carter, George H.W. Bush and Ronald Reagan all earned hefty fees on the lecture circuit.
Clinton's situation is more complicated because he is involved in a global web of commercial and philanthropic relationships. And he is subject to more scrutiny than his retired peers because his spouse is running for president.
Sen. Clinton has been challenged during the campaign to take the voluntary steps of releasing her tax returns and disclosing donors to the Clinton Foundation.
The Clinton campaign said in an e-mail that the candidate would release "tax information at tax time in April" but did not commit to releasing the returns themselves.
Clinton's Democratic rival, Illinois Sen. Barack Obama, has released his tax returns. The presumptive Republican nominee, Sen. John McCain of Arizona, has not done so.
The Clinton Foundation's funding stream has been a sensitive topic since the former president was assailed by members of Congress for reportedly accepting a $450,000 library contribution from the ex-wife of fugitive financier Marc Rich shortly before pardoning Rich for tax evasion in 2001, just before Clinton left the White House.
The Clinton campaign said the Clinton Foundation would release a list of future donors if Hillary Clinton is elected president.
Contributors to the Clinton Presidential Library, which was paid for by the Clinton Foundation, gave with the "understanding that they may remain anonymous as provided by law," the Clinton campaign said in its statement. "Retroactively revising the rules would be unfair."
At the same time, at least twice previously the foundation or a related organization has released names of donors.
In 2004, a publicly accessible computer terminal at the Clinton Presidential Library briefly held a list of contributors to the facility. After The New York Sun published the list, the computer went dark.
The givers included charitable foundations, longtime political supporters and a smattering of foreign governments, including those of Qatar, Taiwan, Brunei and Kuwait. The Saudi royal family also contributed.
Foreign governments also have donated to other presidential libraries, including that of Clinton's predecessor, George H.W. Bush, and President Bush last week said he would consider foreign contributions for his library.
In 2005, the IRS filing for the Clinton HIV/AIDS Initiative Inc., a charity that subsequently was folded into the Clinton Foundation, voluntarily listed donors who gave more than $5,000.
About two-thirds of the $16 million in the organization--more than $9.7 million--came from foreign organizations. Other major donors included the Bill and Melinda Gates Foundation.
The largest donation, $4.5 million, came from the London-based Children's Investment Fund Foundation, the charitable arm of The Children's Investment Fund, a large hedge fund.
In some cases, contributions to the Clinton Foundation have come to light because they were made in exchange for an appearance by Clinton. That was the case with his appearance on behalf of Accoona, which was trying to build buzz about its prospects.
It's not clear who invited Clinton. Current Accoona CEO Val Zammit said the event occurred prior to his tenure. A person answering the phone of former CEO Stuart Kauder said he would have no comment.
Accoona's former chairman, Eckhard Pfeiffer, who previously had been CEO of Compaq Computer Corp., could not be reached for comment.
Kasparov was recruited to help Accoona by its co-founder, Armand Rousso, whose background includes a lengthy career as a chess impresario. But Rousso's background also includes a conviction for securities fraud in France and a guilty plea to a similar charge in the U.S. in 1999, according to a prospectus for Accoona's short-lived U.S. public offering. The charges did not pertain to Accoona.
Rousso owns about 14 percent of Accoona's shares and was paid $3 million for consulting for Accoona from 2004 to 2006, the prospectus states.
Rousso could not be reached for comment.
Accoona's main partner is China Daily Information Co., a subsidiary of Chinese government-run China Daily, the country's largest English-language newspaper, which has put the Accoona search engine on the front page of the Web version of its paper.
Accoona's prospectus acknowledged that the company is subject to censorship by the Chinese government and that the "Ministry of Public Security has the authority to order any local Internet service provider to block any Internet Web site at its sole discretion. ... Furthermore, we are required to report any suspicious content to relevant governmental authorities."
Clinton aide Yarrow said the former president has defended dissenters using the Internet in China.
Comments
I'm pretty certain that the contributions are for past deals the Clintons did for their sponsors. And I'm sure GW is going to get a windfall once he leaves office, too - and it won't be because he has a great command of the English language.
Posted by: Bud McFarlin | March 3, 2008 10:23 PM
Is this story supposed to be a threat to obammy's campaign, a benefit to it, or is it some sort of racist thing? If not, why are you printing it?
I thought the only stuff printed in here is that which praises or defends the father, son, and holy obammy?
Posted by: Dewey Cox | March 3, 2008 11:17 PM
Are not these purchases of shares tax deductible for the "donor" and, of course, are tax exempt for the recipient, Mr. Clinton and his "foundation," which seemingly has no disclosure requirements in spite of its U.S. tax protected status. And who gets gored? Why, you and me, and the other people who pay taxes to compensate for the tax-free largesse to the Clinton "foundation." Or is this just a huge money-laundering scheme?
Posted by: Gordon | March 3, 2008 11:36 PM
Bill has gone after the big bucks now. One of many murky influence peddling deals with a collection of shady billionaires:
"Billionaire Vinod Gupta, the owner of InfoUSA, a data-processing and marketing firm in Omaha, has paid Bill Clinton "$3.3 million in consulting fees, has raised hundreds of thousands of dollars for the Clintons' campaigns and contributed $1 million to the Clinton Foundation. Gupta has given the Clintons the use of his private jet, and has accompanied them on vacations, including a New Year's Day jaunt to Acapulco in 2002.
Gupta's generosity to the Clintons led to a revolt among some stockholders in his company. They are suing InfoUSA, alleging that Gupta wasted $900,000 in company funds flying the Clintons around the world and paying the former president huge fees for little work." (Newsweek, Feb. 4,2008 edition)
Posted by: Hedcutter | March 3, 2008 11:40 PM
Bill Clinton has moved to the BIG bucks now:
"Billionaire Vinod Gupta, the owner of InfoUSA, a data-processing and marketing firm in Omaha, has paid Bill Clinton "$3.3 million in consulting fees, has raised hundreds of thousands of dollars for the Clintons' campaigns and contributed $1 million to the Clinton Foundation. Gupta has given the Clintons the use of his private jet, and has accompanied them on vacations, including a New Year's Day jaunt to Acapulco in 2002.
Gupta's generosity to the Clintons led to a revolt among some stockholders in his company. They are suing InfoUSA, alleging that Gupta wasted $900,000 in company funds flying the Clintons around the world and paying the former president huge fees for little work." (Newsweek, Feb. 4,2008 edition)
Posted by: Anonymous | March 3, 2008 11:57 PM
Is transparency impossible to achieve? What are we going to do with our country? I'm still hoping. Maybe a day will come when candidates will be able to speak in more than just sound-bites and the media will pause long enough to listen and report.
This article is a good example of detailed, balanced, neutral reporting that assumes we consumers of information have brains.
Posted by: Karen | March 4, 2008 12:05 AM
Bud,
You may be right about the English language part, but B.J. Clinton only talked the talk while President Bush walked the walk.
EIGHT terrorist attacks at home and abroad, and 9/11 was planned for THREE years under B.J's nose and he did N-O-T-H-I-N-G!
President Bush kept our country safe!
Get REAL you IDIOT MORON!
Paulo
Posted by: Paulo | March 4, 2008 12:46 AM
Amazing. More payouts to the Clintons from shady financiers and the Chinese Communist government.
Norm Hsu II.
Posted by: Alice Palmer | March 4, 2008 12:59 AM
The way the Clintons cash in on their role in public life in exchange for favors or even pardons, as it appeared, is hard to take. It leaves one feeling that he is mostly the car salesman we always thought he was. However, since he has no other qualification to sell than his political expertise and desrves some reward for his efforts, perhaps one shouldn't complain. After all, his position has slipped drastically in the last few months, and the poor guy had pretty humble origins.
One irony is that his valiant efforts to clean the stain of his somewhat grubby adventures in the female direction by funneling AIDS drugs to Africans may not pan out, since the evidence that this is bad science accumulates higher and higher each year.
Posted by: hereticnyc | March 4, 2008 1:45 AM
And your point! He cashed in and? He obviously knows about business. Look at what happened to our national economy under Bill. NOT ALL THAT BAD WAS IT. Now compare that to George The First The Great Ronald Reagan and of course George The Dim Witted.Plus he is doing good for all mankind with much of that wealth. SO AGAIN YOUR POINT? You dip stick.
Posted by: Rick B | March 4, 2008 3:11 AM
I'm pretty certain that the contributions are for past deals the Clintons did for their sponsors. And I'm sure GW is going to get a windfall once he leaves office, too - and it won't be because he has a great command of the English language.
Posted by: Bud McFarlin | March 3, 2008 10:23 PM
Bud,
Bushie Jr currently has a 19% approval rating but if you're still wondering what morons reside in that 19%...I give you....PAULO!
Posted by: John Hussein E | March 4, 2008 4:36 AM
My comment is simple; if Hillary keeps the negative message that is actually harming the strength and unity of the Democratic party and win the nomination, I will simply vote for
John McCain in the general election. So Hillary will not be president. Because of John McCain age, he will have one term. That way Barack will be president in 4 Years time. The only wrong thing about that is that we will have to wait another 4 years before we see the change the entire World needs.
I think that majority of Barack Obama supporters will do same. This is tactical decision if Hillary keeps with the negative campaign.
If she wins the nomination fair, she will get my support.
Her message for example the video of 3 am is a message that normally will comes from the Republican Party. This negative campaign will therefore negatively impact the Dem Party and John McCain is the only one who is the winner of Hillary Video message.
I am sorry but in this case I will rather send John McCain in the white house and wait for 4 years before Barack takes office as president of the United States of America.
Posted by: mkc2303 | March 4, 2008 4:36 AM
Bill Clinton is a great
spinner and also...
The Cry Baby In Chief is trying to spin the belief
that her momentum is beginning to grow
but in actuality the true reality
is that it is frozen in the snow.
Posted by: Roland Brad, Chicago, USA | March 4, 2008 6:55 AM
Well if Rudy can make millions off of 9-11 and deciding he is "America's Mayor" (NOT) why shouldn't Bill use his celebrity to raise/earn money? After all, the Clinton's had huge debts once he was out of office and I was always told "charity begins at home". So if he could raise enough to retire those debts and do charitable work why not? Just like the Rezko thing and Obama, could he possibly have known all the deals that Rezko was doing?
Posted by: lochnessmonster | March 4, 2008 7:01 AM
Well if Rudy can make millions off of 9-11 and deciding he is "America's Mayor"
Posted by: lochnessmonster | March 4, 2008 7:01 AM
Thats kinda like McCain. Somehow being a Vet makes you a military genuis. I guess I'll run next time. To me, thats like saying because I'm a consumer, I'm an economic master.
Posted by: bill "hussein" r. | March 4, 2008 8:04 AM
Paulo,
Why did President Bush wait until 3000 more Americans were murdered before he did anything? Why do we spend in ONE MONTH more in Iraq than we've spent during the entire time we've been in Afghanistan trying to bring Bin Laden to justice?
Posted by: jethro | March 4, 2008 9:44 AM
Bill Clinton makes money. Who cares. Good for him.
Paulo & jethro, watching you two try to blame two presidents for 9/11 is ridiculous. In my view, the murdering savages that premeditated, deliberated for three years, then intentionally murdered 3000 Americans are 99.99% percent responsible. Bill Clinton, George Bush, the CIA, Rudy Giuliani, and any other American you can think of and want to sling mud at are, at most, a combined .01% responsible. Watching Americans squabble over the .01% to score cheap political points is not only disingenuous, but sad. Bush and Clinton are no more responsible for 9/11 than FDR was for Pearl Harbor. There were idiots in '41 that blamed FDR for PH, and they have been relegated by history to a footnote, and will be joined shortly by people who blame Clinton and/or Bush for 9/11.
Posted by: Herbie H. | March 4, 2008 11:44 AM
FINALLY!
Thank you so much for doing what your colleagues ought to be doing, too!
It is OK to ask hard questions, why did HRC say initially she would only release the above AFTER she was the nominee?
Was that to prevent “buyers’ remorse” that her campaign now alleges that the voters have toward Senator Obama?
IT SEEMS TO ME, THAT WHEN A CAMPAIGN DECIDES TO THROW THINGS, IT IS IMPORTANT TO LOOK TO SEE WHAT IS LEFT ON THEIR HANDS.
Since Gov. T.Strickland won his gubernatorial race by insinuating that his opponent was “hiding something” by not releasing his tax returns, HOW can he support a candidate for President who is doing the exact same thing that he alleged “was hiding something”…...
If the political race had been reversed, and HRC had won 11 in a row, wouldn't Obama be as much a non-news issue as Mike Huckabee?
For me that means the press cannot allowed themselves to be muzzled and manipulated by someone who is BOTH their victim and their victimizer.
The press wins, cable news networks win; but that sure doesn't put meat and potatoes on the table.
Since no one in the press is asking, where's Senator Clinton's "meat" (tax returns)????
This voter has a HUGE beef with that!
When campaigns go negative, the BIGGEST losers are the voters.
IF THIS CHARADE OF A PRIMARY CONTINUES AND DRAGS ON WITH ITS ESCALATING NEGATIVITY, THE CHANCE FOR THE DEMOCRATIC CANDIDATE TO WIN THE WHITE HOUSE AND ADD TO THE MAJORITIES IN BOTH HOUSES IS DIMINISHING PROPORTIONALLY.
Posted by: Dari Carnes | March 4, 2008 12:55 PM
And how is this than GW Bush getting foreign politicians to pony up the 4200 million he wants to build his propaganda, I mean, library and institute down in Texas? Heck, he hasn't even left office yet and he's raking in the bucks!
Posted by: BC | March 4, 2008 4:22 PM
Sorry, didn't mean to suggest there was something wrong with making money. However, exploiting one's public position for private gain when your policies have screwed the poor is not so great. Clinton's welfare reform is nothing to be proud of when NAFTA makes it hard for uneducated labor to find new jobs unless retraining is a top priority. The whole point of this country being so rich is that it should be able to look after the underprivileged effectively.
And anyhow the suspicion is that they trade favors for cash which don't bear inspection, and that is why they refuse to produce the records.
For profit charity is not really charity, by the way. It is just business. The credit is not there on any moral basis.
Posted by: hereticnyc | March 5, 2008 2:54 AM
Ex Presidents cashing in after they leave office. Did you you come up with that lead all by yourself or did you get help from Inspector Clouseau? Good work Sherlock!!!
Posted by: David Korer | March 5, 2008 1:51 PM
Remind us again of the Rezko deal? Hmm, people in glass houses ...
Clinton's convicted Pakistani bundler Ray “I'm just recalling how close I've been with the Clinton family and those nights, movies, dinners, lunches in the White House” Jinnah
LA Times (http://www.caclean.org/problem/latimes_2007-04-15.php)
Stuart “$30,000 in straw man donations to HillPAC” Schoenburg
LA Times (http://www.caclean.org/problem/latimes_2007-04-15.php)
Norman “I was loyal to Senator Clinton” Hsu, who in January was sentenced to three years in prison in San Francisco for stealing about $1 million from investors and under indictment in New York for allegedly swindling investors out of $20 million between 2000 and 2007 by getting them to invest $60 million in a Ponzi scheme and promising them high returns on short-term investments.
The Clinton campaign's first judgement on Hsu? Howard Wolfson, a Clinton campaign spokesman, repeated a statement he had made earlier.
“Norman Hsu is a longtime and generous supporter of the Democratic party and its candidates, including Senator Clinton. During Mr. Hsu’s many years of active participation in the political process, there has been no question about his integrity or his commitment to playing by the rules, and we have absolutely no reason to call his contributions into question or return them.”
and never forget,
Peter “Three convictions ‘missed’ by Clinton campaign vetters” Paul.
While Rezko may have been under active investigation at the time of the land deal, Paul was a ***three-time convicted felon*** whose photo, with both Clintons, appears on FactCheck.org alongside some laughable defenses (“a politician's routine call scratching under the chin those who are knocking themselves out for her,” “The ONLY finding of anything illegal in connection with the fundraiser was the underreporting of the cost of the event by about $722,000, which resulted in a fine of $35,000”) of the Clintons on its site.
Ah, yes, we can be pleased to learn that there are ONLY a few broken laws in the Clinton history.
Posted by: MKSinSA | March 5, 2008 4:38 PM
Hilarious discussion between Hillary and obama. Must watch.
http://www.youtube.com/watch?v=E7150u9sfCo
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