Judicial Watch • Weekly Update: Clinton Pardon Scandal Reemerges

Weekly Update: Clinton Pardon Scandal Reemerges

Weekly Update: Clinton Pardon Scandal Reemerges

MARCH 21, 2014

March 21, 2014

 

Obama Agency Flouts Transparency Law

On its website, the Obama Consumer Financial Protection Bureau (CFPB) proudly boasts:

Our mission is … ensuring that consumers get the information they need to make the financial decisions they believe are best for themselves and their families—that prices are clear up front, that risks are visible, and that nothing is buried in fine print. In a market that works, consumers should be able to make direct comparisons among products and no provider should be able to use unfair, deceptive, or abusive practices.

And that, to put it kindly, is what is popularly known as “false advertising.” In fact, it is so palpably false that it might be laughable – were the CFBB’s perversion of its own mission not so serious. The recent efforts by Judicial Watch and the Washington Examiner shed some sunlight into the operations of the CFPB and provide new insights into why this secretive, shadowy agency should never have been created in the first place.

On March 3, 2014, we filed a Freedom of Information Act (FOIA) lawsuit, on behalf of the Examiner, against the CFPB seeking to obtain records detailing $90 million in cost overruns for the remodeling of the CFPB Washington headquarters. According to a February 14 Examiner article, over the past two years, the cost of the remodeling project has soared from $55 million to $145 million. How’s that for making sure “that prices are clear up front, that risks are visible, and that nothing is buried in fine print?”

Judicial Watch filed its lawsuit in support of a July 24, 2013, FOIA request filed by Richard Pollack, a senior investigative reporter at the Washington Examiner, seeking access to records concerning the headquarters’ renovation. Over the course of several months, the CFPB notified the Examiner that it had located a total of 350 pages responsive to the FOIA request. However, CFPB informed the Examiner it was withholding 335 of the 350 pages.

In an editorial addressing the CFPB refusal to comply with its FOIA request, the Examiner observed:

CFPB officials resolutely refuse to provide relevant documents sought by the Examiner concerning the building renovation. The few cursory documents that were turned over shed no light on the project. Since CFPB has all the time in the world, plus legions of lawyers and a huge budget that Congress can’t touch, odds are good that shining the disinfectant of sunlight won’t happen any time soon. That’s an open invitation for waste, abuse and corruption.

At a heated January 28,2014, hearing held by Rep. Patrick McHenry (R-NC), chairman of the Oversight and Investigations Subcommittee of the House Financial Services Committee, CFPB Director Richard Cordray obstinately refused to provide details about the remodeling project’s soaring costs. Rep. Jeb Hensarling, chairman of the House Committee on Financial Services pointed out, “You are spending more per square foot than the Trump World Tower.” And McHenry subsequently asked the Federal Reserve inspector general to initiate an investigation into the cost overruns.

It has taken all of that to try to get the CFPB simply to fulfill its stated mission of “ensuring that consumers get the information they need.” They are still stonewalling, and we have now entered the fray to force their hand.

Mark Tapscott, the executive editor of the Washington Examiner, said, “Documents to explain why a government bureau is spending so lavishly on renovations to its headquarters are exactly the kind of information the FOIA is meant to make available to taxpayers. We shouldn’t have to go to court to get them, but it’s important to make the point that the American people have just as much of a right to know what CFPB is doing with their money as they do their local dogcatchers.”

This is not the first time Judicial Watch has gone to court to procure documents the CFPB was hiding from the public. In June 2013 we obtained records from the Consumer Financial Protection Bureau (CFPB) revealing that the agency has spent millions of dollars for the warrantless collection and analysis of Americans’ financial transactions. The documents also revealed that CFPB contractors may have been required to share the information with “additional government entities.”

The full extent of the CFPB personal financial data collection program was revealed in a document entitled “INDEFINITE-DELIVERY INDEFINITE-QUANTITY (IDIQ) STATEMENT OF WORK” stating: “The CFPB seeks to acquire and maintain a nationally representative panel of credit information on consumers for use in a wide range of policy research projects… The panel shall be a random sample of consumer credit files obtains from a national database of credit files.” At the time, the US Chamber of Commerce accused the CFPB of breaking the law by demanding the account-level data without a warrant or National Security Letter.

The fact is, from its inception, the CFPB has been placed deliberately and dangerously out of reach of oversight by the American people. It has acted with arrogant indifference to attempts to pierce its veil of secrecy, even while violating the privacy rights of millions of Americans.  This lawsuit could help shed some much-needed light on what is otherwise an essentially covert operation with oppressive control over consumer finances. And Judicial Watch is pleased to help the Examiner obtain these documents on behalf of the American people.

Clinton’s Marc Rich Pardon – the Tell-Tale Cable

For years, there has been conjecture as to why Bill Clinton, in the waning moments of his presidency, suddenly and unexpectedly granted a full pardon to fugitive financier Marc Rich. Even the New York Times, normally a shameless cheerleader for the Clintons, excoriated the president, saying “Bill Clinton’s last-minute pardon of Marc Rich … was a shocking abuse of presidential power … Mr. Clinton’s irresponsible use of his pardoning authority has undermined the pursuit of justice.” And Clinton himself later described the pardon as “terrible politics. It wasn’t worth the damage to my reputation.”

Questions about the scandal are resurfacing in light of Judicial Watch’s obtaining a confidential cable from the U.S. Department of State that had been under tight wraps since 1995. The cable – from Clinton’s ambassador to Israel to his high-ups at State – reveals high-level Israeli efforts to persuade State Department officials to intercede with Department of Justice (DOJ) to enable Rich to conduct Israeli business affairs worldwide directly relating to Israeli-Palestinian peace negotiations.

Specifically, the cable, obtained through a Judicial Watch June 2013 Freedom of Information Act (FOIA) request, provides details of 1995 efforts by apparently top Israeli officials to pressure their counterparts at the State Department to intervene with the DOJ to withdraw outstanding arrest warrants against Rich on charges he had violated America’s 1981 domestic oil-price along with 64 other crimes, including racketeering and “trading with the enemy.” Israel, it turns out, had recruited Rich, then living in Switzerland, to travel internationally in order to raise funds to finance economic deals between the Israeli government and the Palestinian Authority.  Rich died on June, 26, 2013, and Judicial Watch filed a Freedom of Information Act (FOIA) request about him with the Department of State on the same day.

While the Israeli official who interceded on Rich’s behalf is not identified in the cable obtained by Judicial Watch, he or she was in a sufficiently high-level position to confer directly with then-U.S. Ambassador Martin Indyk and Clinton administration Middle East convoy Dennis Ross. The official was also able to persuade Indyk to meet with Rich’s lawyer, Isaac Herzog, just three days after requesting that he do so. The confidential classification of the cable was extended by the State Department on February 10, 2014 for an additional 15 years, following the Judicial Watch FOIA request, in an apparent effort by the State Department to keep the names of the Israeli official confidential. Ambassador Indyk is now President Obama’s Special Envoy for Israeli-Palestinian Negotiations.

In the cable, entitled “[REDACTED] REQUEST FOR INTERVENTION WITH DOJ ON BEHALF OF MARK [SIC] RICH,” Indyk writes:

    • During August 29 [1995] meeting with Dennis Ross and I, [REDACTED] raised the issue of Mark Rich, a wealthy businessman now resident in Switzerland, whom [REDACTED] has recruited to head up an effort to promote private sector involvement in Palestinian economic development. [REDACTED] asked me to see Rich’s lawyer, Isaac Herzog, to be briefed on the subject. He further requested that Dennis and I follow up in Washington to try to resolve the problem.
    • Rich paid a large fine and according to Herzog, DOJ is no longer pursuing the matter … Nevertheless, there are still international warrants outstanding for Rich’s arrest. This severely restricts his travel … [REDACTED] request is that State consider the project and, if it is regarded as worthwhile, contact DOJ and communicate its interests in enabling Rich to engage in these activities – specifically that:  … The GOI [Government of Israel] has notified State that it is in the GOI’s interest to facilitate the travel on behalf of Mark Rich to advance the ‘Economic Solution’ … The U.S. has a legitimate interest in fostering these objectives.

Interestingly, the Indyk confidential memo clams that the U.S. ambassador, who at the time had been a key figure in American-Israeli affairs for more than a decade, had no knowledge of Rich or the activities that had led the commodities trader 1983 indictment. According to Indyk’s confidential memo, “We have never heard of Mark [sic] Rich and have no way of evaluating his ability to contribute to this effort by bringing in foreign investors.” The ambassador added, “However, [REDACTED] is pushing him hard.”

On January 20, 2001, just hours before leaving office, President Clinton granted Rich a highly controversial presidential pardon. It was widely alleged at the time that Rich’s pardon had been the result of Denise Rich having given more than $1 millionto the Democratic Party, including more than $100,000 to the Senate campaign of Hillary Clinton and $450,000 to the Clinton Library foundation. As far back as 2009, journalist Joe Conason, writing in Salon had conjectured, “Winning the pardon was a top priority for Israeli officials because Rich had long been a financial and intelligence asset of the Jewish state …” But the confidential cable obtained by Judicial Watch is the first solid evidence of the usually close ties between the Israeli government and the fugitive financier.

The bottom line is that the cable raises salient new questions about the depth and breadth of the relationship between Marc Rich and the Israeli government. And they suggest possible new insights into the motivations behind the scandalous last-minute pardon granted by Bill Clinton. Ambassador Indyk should now disclose what he knows about the Rich pardon. As should John Podesta, Eric Holder, and Hillary Clinton – all high-level Obama appointees embroiled in the Rich pardon scandal.

Government Employee Pension Scandal in Arizona

Corruption is not a “Washington-only” disease.  Local and state corruption is endemic and often unchecked.  That’s why Judicial Watch vigorously monitors and combats public corruption not only in Washington, DC, but in states across the nation.  This week our focus turns to Arizona.

According to the Arizona Republic, Arizona’s Public Safety Personnel Retirement System (PSPRS) now has a funding ratio of just 59 percent. That means it has only enough money to pay for just over half of its current and future liabilities. Yet, despite that, the Republic reported on August 1, 2013, that the PSPRS gave “five- and six-figure bonuses and additional pay … to managers and investment staff even when the pension trust posted financial losses in 2008, 2009 and 2012 ….”

To make matters worse, a federal grand jury is now investigating the PSPRC to determine whether it may have inflated its real estate investment values in order to trigger those huge bonuses to top staffers. And the PSPRC appears to be in full cover-up mode. When the Republic requested a copy of the grand jury’s subpoena of the PSPRC, the system’s pension-trust managers refused to hand it over, despite a ruling by the assistant state attorney general that it is public document.

In short, the PSPRS has decided that the public is not entitled to public records. That’s why, on March 11, Judicial Watch requested that PSPRS provide us with a copy of the federal grand-jury subpoena pursuant to the Arizona Public Records Law. On March 13, PSPRS refused to comply with the request. So on that same day, we filed a lawsuit in the Superior Court for the State of Arizona against PSPRS arguing, “Defendant has violated Arizona Public Records Law by improperly withholding information and failing to provide access to the requested record in its entirety.”

By way of background, the Arizona PSPRS manages a $7.7 billion trust to pay for the retirement benefits of 53,000 of the state’s police officers, firefighters, elected officials, and correctional officers. On March 7, The Arizona Republic reported that the U.S. Attorney’s Office had begun investigating PSPRS after its in-house counsel and three high-level investment analysts quit in protest last year over concerns about the way real-estate values were being recorded. According to the Republic article, the federal investigation focuses on whether PSPRS intentionally cooked the books on its real-estate values in order to pad the pockets of top staffers. In late April, after the story broke, PSPRS conceded that it has now reduced the value of its real estate investment portfolio by nearly $40 million, due to “accounting errors” – which included the double counting of some property values.

At the center of the PSPRS controversy is its real-estate portfolio managed by the Scottsdale-based Desert Troon Companies. According to the Arizona Republic, “Trust records show that the current administration in fiscal 2009 began shifting real-estate assets from other companies to Desert Troon and that the value of property managed by Desert Troon more than doubled over that period.”

The Republic further reported:

The trust’s collective losses from properties managed by Desert Troon from fiscal 2009 to 2012 were at least $284 million, according to annual reports compiled by The Republic. In fiscal 2012, properties that Desert Troon managed lost at least $131 million in value …

Despite the losses, the PSPRS trust paid Desert Troon more than $12 million in fees in 2012, according to a January 22 article in the Arizona Republic.

The bottom line is that it is up to the grand jury to determine whether there is sufficient evidence to indict the PSPRS pension-trust managers for criminal conduct. But, it is not up to the PSPRS pension-trust managers to decide if the public has a right to public records. Their continued stonewalling suggests that the PSPRS has something to hide. And, if so, Judicial Watch intends to find out the full extent of it. We will keep you posted.

Press Conference on New Developments in Election Integrity Enforcement

On Monday, March 24 at 10:30 a.m. ET we will host a press conference to discuss Judicial Watch’s new efforts to ensure clean, fair elections for every voter. The event will take place in the National Press Club’s Murrow Room.

I will be moderating the event. Other speakers will be Paul Orfanedes, Director of Litigation; Robert D. Popper Senior Attorney, who also is the former Deputy Chief of the Voting Section of the Civil Rights Division of the U.S. Department of Justice; and Christopher Fedeli, Senior Attorney at Judicial Watch.

These are historic efforts to require states to take reasonable steps to ensure cleaner election rolls under federal law, and you can watch the event live at www.judicialwatch.org/live.


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  • JimmyChin

    Mind boggling. Excellent reporting on such detailed issues. Good job!

  • adamsdc

    Great work as usual. The new revelations about the biggest tax evader in US history, who never paid a dime of the millions he owed before Bubba pardoned him, are most telling. And of course this got zero coverage in the Obama media harem.