Clintons' Fall Guy May Turn the Tables; The SEC and the IRS are investigating securities and bank fraud allegedly perpetrated by a Clinton fund-raiser who says he is the victim of a political vendetta

0 Comments | Insight on the News, Oct 27, 2003

One such snarly issue into which prosecutors are accused of not wanting to delve involves demands made on SLM to transfer at least $100,000 worth of company stock as part of an alleged quid pro quo between the Clintons and Paul to enlist Bill Clinton to promote the company after he left the White House. Until recently, Insight could not confirm the alleged demands. However, following up on a Los Angeles Times report this summer, Insight now has obtained internal communications from the Hillary Rodham Clinton for U.S. Senate Committee Inc., the political entity she used to raise funds for her campaign in 2000. These documents, above, appear to confirm the allegations that SLM stock-transfer demands were made and paid.

For example, copies of faxes identified as coming from David Rosen, the national finance director for Hillary Clinton's political organization, do indeed instruct the delivery of $100,000 worth of SLM stock to the Working Families Party in New York state. This was a political-action group that threw support to Clinton's 2000 bid for the U.S. Senate.

In a fax dated Aug. 24, 2000 ("in RE: Stock Transfer"), there is a reference to an Aug. 3, 2000, memorandum from Rosen to Steve Gordon at SLM, in which Rosen reveals the brokerage account for the Working Families Party as Morgan Stanley/Dean Wittier, the account number, and its representative, phone number and address in Staten Island, N.Y. Both documents say at the bottom: "Paid for by the Hillary Rodham Clinton for U.S. Senate Committee Inc. Contributions are not tax deductible for federal income-tax purposes."

The Los Angeles Times has reported that neither Working Families nor others would explain the instructions in this document or say whether the authorized stock transfer actually took place. Nor has Insight been able to confirm that the deal was "done" as handwritten on the Aug. 3, 2000, communication. Political operatives tell this magazine that such schemes often have been used by political campaigns to hide movement of funds between and among various like-minded groups that funnel money for campaign expenses without recording it with the Federal Election Commission (FEC) and thus revealing it to the public.

Although federal prosecutors, both in New York City and in Los Angeles, were told of this purported stock-related deal to support Hillary Clinton's run for the U.S. Senate, sources claim the prosecution did not report it either to the FEC or the SEC. Nor did the federal prosecutors publicly mention any of the Paul political schemes on behalf of the Clintons that were run through his various companies the very same companies the indictments claimed were involved in defrauding the public and other illegal activities.

Nor do Clinton's FEC records, which are voluminous, show: 1) any tangible benefit to the company from the alleged pass-through of SLM stocks or 2) Paul's nearly $2 million of in-kind contributions. The FEC records do show about $400,000 received during the summer of 2000 from SLM, but both SLM executives and Stan Lee reportedly have denied making any such soft-money contribution. In fact, it was Paul who made the donation, sources say. And, in the cache of documents obtained by federal prosecutors Insight has found records showing Paul "reimbursed" at least $100,000 for the Stan Lee/SLM contribution claimed by Hillary's campaign.