By Matthew Mosk and Joe Stephens
Washington Post Staff Writers
Saturday, November 22, 2008
As President-elect Barack Obama moved closer to making Sen. Hillary Rodham Clinton his choice for secretary of state, independent legal experts said unwinding some of the most nettlesome conflicts involving her husband's global fundraising would prove extraordinarily complicated.
Perhaps the best evidence of this is a perpetual donation to the William J. Clinton Foundation from Canadian tycoon Frank Giustra, in which Giustra has promised to give the charity half of the future profits from his global mining empire for the rest of his life.
The unorthodox arrangement could present ethical concerns for Sen. Clinton if foreign governments believe they can curry favor with her by helping Giustra's far-flung mining operations, or if they fear that restricting his activities would damage their relations with her.
"It presents a really serious problem because the decisions a Secretary Clinton might make could be perceived as affecting the [charity's] cash flow," said Stephen Gillers, a legal ethics expert at New York University School of Law.
The situation underscores the complexity of the negotiations in which top aides to Obama and Clinton engaged over the past week. Those familiar with the talks said they covered a range of concerns, including the former president's profitable public speaking, his global investment work and a mostly secret network of donors to Clinton initiatives.
Clinton advisers say they diligently worked to resolve questions. The Clinton Foundation, for instance, turned over 208,000 donor names for review by Obama's transition team, even though many donated with promises of anonymity.
"Bill Clinton has said publicly he will do whatever they want," said one Democrat with ties to Clinton who is familiar with the negotiations. "Not just with the Giustra stuff, but with the library, the foundation, the donors -- he has demonstrated the willingness to go above and beyond."
At the same time, those close to the former president said they would be reluctant to see him back away from charitable work that has provided a source of AIDS treatment for 1.4 million people, a major engine in the effort to reduce greenhouse gases and sponsorship of anti-obesity programs in American schools.
"The Clinton Foundation is not the same as the Clinton personal bank account," said Thomas E. Mann, a Brookings Institution expert on ethics and governance. "It's a nonprofit entity. It has an extraordinary involvement in a whole set of public activities."
Nevertheless, vast amounts of money and prestige are involved, and those factors could pose problems for lawyers at the State Department who work to prevent ethical conflicts from corrupting the nation's foreign policy.
Edwin D. Williamson, who served as the State Department's chief legal adviser under President George H.W. Bush, said he does not know how the agency would resolve the potential conflicts. "If a client came to me with this set of facts, I would describe it as nightmarish," he said.
Several experts said they could not envision a solution that would not involve the former president backing away from global fundraising to some extent.
"It certainly is, I think, problematic enough that if she becomes secretary of state, Bill Clinton ought to be expected to look for ways to separate himself from the foundation," said Dennis Thompson, director emeritus of Harvard University's ethics center.
"It's hard to know how they could disentangle this interest from her duties as secretary of state," agreed Michael J. Smith, a University of Virginia politics professor.
Stanley Brand, a former counsel for House Democrats, said it is a "knotty problem" in part because "President Clinton, in his inimitable style, has raised the bar on what a former president has done."
But a complicated situation -- such as the Giustra donation -- may have an easy solution, he said. "There's only one way, which is draconian, which is to void the bequest. . . . I don't how else you remedy it."
A spokesman for the Clinton Foundation declined to comment. A spokesman for Giustra did not respond to written questions.
Bill Clinton's dealings with Giustra already have posed a public relations problem for his wife, in large part because, by accompanying Giustra on foreign business trips, the former president may have appeared to lend his stature to Giustra's mining ventures.
In 2005, Clinton flew with Giustra to Kazakhstan, where the two dined with the president of the former Soviet republic just as Giustra was preparing to buy into uranium mining projects controlled by a state-owned company. The same year, they traveled to Colombia as one of Giustra's firms brokered a coal mining venture there.
After those trips, Giustra expanded his charitable giving. In June 2007, the two men launched the Clinton Giustra Sustainable Growth Initiative -- a project that aims to bring sustainable growth to a number of countries, including those where Giustra has had mining interests. The former president told reporters, "I am very humbled by his gift and grateful for his support."