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Hazelnut Flap Is Building
White House Disavows Clinton In-Law's Foreign Dealings

By John F. Harris
Washington Post Staff Writer
Saturday, January 1, 2000; Page A06

The Clinton administration sent word this week to the government of the former Soviet republic of Georgia disavowing a controversial business venture being pursued by Tony Rodham, the brother of first lady Hillary Rodham Clinton, and urging officials there not to let the issue drive a wedge in relations with the United States.

A National Security Council official, acting on behalf of national security adviser Samuel R. "Sandy" Berger, called the Georgian Embassy here on Tuesday to emphasize that President Clinton was opposed to his brother-in-law's involvement in a plan to export hazelnuts from Georgia but that his requests that Rodham drop the business were not followed, according to NSC spokesman James Fallin.

Rodham's hazelnut venture--which he once said he was dropping but has since revived--has caused political problems for Georgian President Eduard Shevardnadze, a staunch U.S. ally. This is because the first lady's brother has been closely linked with one of Shevardnadze's chief rivals.

While Clinton administration officials labored to minimize the diplomatic damage from Rodham's hazelnut dealings, Republicans tried to maximize the potential political embarrassment for Hillary Clinton and her New York Senate bid.

"Senate wannabe Hillary Clinton should demand that her kid brother immediately get Georgia off his mind," said Republican National Committee spokesman Mark Pfeifle, "and [get out of] this flaky hazelnut scheme."

Pfeifle said the first lady should explain publicly when she learned of her brothers' various trips to Georgia, whether she alerted national security officials about them, and what she has done to prevail upon her brother to get out of business that is in explicit defiance of the president and his national security adviser.

No such explanations were forthcoming this week. The first lady's government spokeswoman, Marsha Berry, said Hillary Clinton agreed with a statement released by White House press secretary Joe Lockhart Wednesday that the administration disapproves of the venture. But Berry declined to address questions about the first lady's knowledge of her brother's venture, or whether she has intervened to try to halt it. Her campaign spokesman, Howard Wolfson, said: "It's not a campaign issue."

But some advisers to Hillary Clinton said they recognize it could become a political issue--even while fretting that there was little to do about it.

"It's a sticky one for Hillary, quite frankly," said one adviser. While it is uncomfortable to have her brother openly defying the national security adviser, the first lady regards the business dealings of Tony Rodham, as well as brother Hugh Rodham, as out of her hands, this adviser said: "She's taken the position, 'They're my brothers, I'm not their keeper.' "

The Rodham brothers, said this adviser, "are independent--I could probably think of other adjectives, but independent may be the most useful in this context."

Tony Rodham did not return a message left on his business voice mail. In previous statements, he has said his Georgian hazelnut venture is his own business, not the White House's. When their hazelnut dealings first came to light last September, both Rodham brothers said they would drop the venture after the White House objected. Washington Post columnist David Ignatius reported this week that Tony Rodham was still pursuing the project--news which White House officials said surprised and infuriated Berger.

The Rodham brothers' Georgia dealings are a problem, from the administration vantage point, because they have been hosted during their travels by Aslan Abashidze, a political boss in the port city of Batumi and a political rival of Shevardnadze.

Abashidze has trumpeted his connections to the Rodhams, suggesting that they are a sign of Clinton administration support for him--boasts that caused distress for Shevardnadze and prompted complaints from his government to Washington.

While the president has disavowed the hazelnut venture, there is no sign it has cooled his personal relationship with his in-laws. He stopped at Tony Rodham's Capitol Hill home on Christmas Eve, and played golf with Hugh Rodham on Wednesday.

The exploratory campaign of Hillary Clinton's likely Republican opponent, New York Mayor Rudolph W. Giuliani, did not return messages seeking comment on the controversy.

Charles Lewis, with the Center for Public Integrity, said the public tends to recognize that "presidents cannot always control their relatives." But the Rodham brothers' ability to strike relationships with well-connected people overseas "has the stench of people trying to enrich themselves by proximity to power. . . . [The first lady] has an obligation as a public official to address this."

© Copyright 2000 The Washington Post Company

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