Largess To Clintons Lands CEO In Lawsuit

Gupta has enjoyed his own benefits from his relationship with the Clintons. Bill Clinton offered him two diplomatic posts -- as U.S. counsel general to Bermuda and as U.S. ambassador to Fiji -- that he did not take. The president appointed him to the prestigious John F. Kennedy Center Board of Trustees during his last week in office.

Both Bill and Hillary Clinton agreed to lend their names to technology schools that Gupta financed in rural India.

Gupta, who grew up in dire poverty in India, has said publicly that he relished his relationship with Bill Clinton. Crew members of InfoUSA's 80-foot yacht "American Princess" said Gupta spoke often of the former president and placed a photo of Clinton in the boat's living quarters. In a 2000 interview with The Washington Post, Gupta described the thrill of crawling into bed in the Lincoln Bedroom. He said he called his mother to tell her, "I've come a long way."

Founded in 1972, Gupta's firm InfoUSA is now valued at $600 million and says it provides database marketing and processing services to more than 4 million customers.

The payments to Bill Clinton and the jet travel, along with other Gupta spending, attracted the attention of dissident investors in InfoUSA in 2005. Three investor groups sued the firm in a Delaware court, alleging that the expenses were unrelated to the business.

Last year, one group -- the Connecticut hedge fund Dolphin Limited Partnership -- tried unsuccessfully to capture three seats on InfoUSA's board of directors, but it fell short despite support from more than 90 percent of shareholders not affiliated with Gupta.

Dolphin owns about 3.6 percent of InfoUSA, as well as other holdings. Firm directors would not comment for this story. None of the high-ranking executives there has made recent political contributions, and a firm adviser said Dolphin intentionally did not name the Clintons in its suit to "keep politics out of it."

The intersection of Gupta's lavish lifestyle and his support of the Clintons eventually brought on the boardroom battle.

Dolphin investors initially sued for documents that might explain why Gupta needed use of a corporate jet, a skybox at the University of Nebraska football stadium and a yacht.

On Friday, Dean, the InfoUSA financial officer, told The Post that such expenditures served a business purpose. He pointed out that when the company helped foot the cost of the White House millennium event, it got its logo on national television on the event podium. In addition, the former president has provided strategic advice, visited the corporate headquarters and given motivational speeches to company employees, Dean said.

"There is just the obvious value of having a former president on your team and at your disposal for advice," Dean said, noting that Bill Clinton once spent three days providing advice and giving talks at a company strategy event. "Three days of a former president is very valuable."

Dean said the company has also brought in Republican luminaries such as former secretary of state Colin L. Powell and former presidential adviser Karen Hughes for speeches or events. "The company is politically agnostic, and we just like doing business," Dean said. "Whatever Vin does, that is up to him."

Flying around the country on corporate jets is a common, if perennially controversial, practice of senators and presidential candidates. It is perfectly legal -- as long as the politicians disclose it and reimburse at the rate of first-class airfare. But the practice has led to recent changes to raise the reimbursement requirement from a first-class fare to a charter rate, making such trips significantly more expensive.

The shareholder lawsuit alleges that the jet became a regular mode of travel for the Clintons. In one instance, the suit stated, Hillary Clinton called InfoUSA in September 2002 to say she was "in desperate need of a plane." The following day, she flew on the corporate jet from White Plains, N.Y., near her house, to Detroit, then Fort Lauderdale and back to White Plains, the suit said. The flights coincided with a series of political events she attended.

The suit does not specify the cost of the senator's flights, though most of the InfoUSA trips taken by the Clintons within the continental United States cost between $10,000 and $20,000, according to company documents cited in the lawsuit. Michigan and Florida political committees reimbursed Gupta's holding company, Everest Investment Management, for Clinton's flights to Detroit and Florida. They paid first-class fares as required by the Federal Election Commission, amounting to just over $2,000 for both flights.

The company spent $146,886 to fly the Clintons with Gupta to Acapulco, Mexico, on New Year's Day 2002 for a vacation.

Under Senate ethics rules, Hillary Clinton was required to reimburse the company only for the cost of first-class airfare, which she did, according to campaign spokesman Phil Singer.

"Everything's been reimbursed in accordance with the FEC and Senate ethics rules," Singer said.

Staff researchers Madonna Lebling and Robert Lyford contributed to this report.