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Fee to Bill Clinton raises questions

A Japanese American firm paid $500,000 for a speech that was never given. Hillary Clinton will face queries as a Senate panel considers her secretary of State nomination.

January 13, 2009|Andrew Zajac

WASHINGTON — Last month, after his wife was nominated as secretary of State, former President Clinton attempted to put an end to speculation about his secretive overseas fundraising by disclosing the names of some 208,000 donors to his foundation, which has collected more than $500 million to pay for a presidential library and to combat AIDS, malaria and other scourges.

But nowhere on that list was the name Sakura Capital Management Co. Ltd.

In 2003, Sakura, a short-lived Japanese American start-up, many of whose principals are not known, paid Bill Clinton $500,000, the highest cash fee he has reported receiving for a speech, for a talk he never delivered.

As the Senate Foreign Relations Committee takes up Hillary Rodham Clinton's nomination today, she is expected to parry questions about whether she might be influenced in any way by any of her husband's donors by pointing to her husband's new openness. But as the Sakura tale illustrates, Bill Clinton's sprawling business and charitable activities retain the potential to complicate his wife's work as the nation's chief diplomat.

"I think it remains a tricky, difficult situation, the safeguards that are in place notwithstanding," said Robert Walker, former chief counsel of the House and Senate ethics committees. "President Clinton's [previous] fundraising from foreign governments and foreign entities poses the potential for appearances of conflict. That's going to be there."

There are several unanswered questions about the fee from Sakura. Why was it so high -- two or three times what he was paid for other speeches on the same trip? Why was the speech canceled by Sakura, and why was Clinton paid the full amount anyway?

Not much is known about the company. Sakura's former president, a New York securities dealer, says he knew only the last name of the partner who is said to have provided the money for the speech. The Panama-based former chairman of the company was the also chairman of a bankrupt flooring company.

Bill Clinton's spokesman at the William J. Clinton Foundation, Matt McKenna, declined to answer most questions about the speech, but he confirmed the payment from Sakura to Clinton. The former president donated the money to the foundation without taking a tax deduction, McKenna said, which he said was why Sakura's name did not appear in last month's disclosures.

The payment was listed as personal income to her husband in Hillary Clinton's Senate financial disclosure form for 2003, he pointed out.

"He gave the foundation the $500K [less expenses], paid the taxes out of his own pocket and took no credit or deduction," McKenna said.

Bill Clinton's involvement with Sakura was announced in a July 2003 news release written by veteran New York publicist Ken Sunshine.

Headlined "President William Jefferson Clinton to Address 'Embracing Our Humanity: Global Security in the 21st Century,' " it described an economic symposium hosted by Sakura to be "attended by several hundred of Japan's prominent civic and business leaders."

Clinton's appearance was to have been sandwiched between appearances in South Korea on Nov. 14, 2003, and Nisshin City and Kyoto in south-central Japan on Nov. 19. His fee was double the $250,000 he was paid for the South Korea and Nisshin City speeches and more than triple the $140,000 he collected for his Kyoto appearance, according to Hillary Clinton's financial disclosure forms.

Sunshine said he wrote the releases at the request of John Matthews, a New York securities dealer who was listed as Sakura's president. Sunshine said Matthews was a friend from Democratic political circles. Matthews managed an office for the late New York Sen. Daniel Patrick Moynihan in the 1980s.

Sunshine's news release stated that "John Matthews, a financial services consultant, heads both offices in New York and Tokyo as president."

For his part, Matthews insisted that he had only a minor role in Sakura. "I was peripherally involved," he said.

Matthews said he invested no money in the company and understood that financing came from a "Mr. Tanaka" in Tokyo. Matthews said he never met Tanaka, didn't know his full name and had no telephone number or other contact information for him. Matthews said he dealt with Tanaka on the telephone and put him in touch with Clinton's representative, the Harry Walker Agency of New York, which did not return messages seeking comment.

About a month before the Nov. 17, 2003, date scheduled for the speech, Matthews said he received a call from Tanaka announcing the cancellation.

"My guess is the [Japanese] partners had a fight. We were all supposed to go to Japan for the speech. I was very embarrassed," Matthews said.

He said Tanaka was an acquaintance of Sakura's chairman, Facundo I. Bacardi, who lives in Panama. In a biography on the Sakura website, Bacardi is listed as chairman and president of Nations Flooring, a bankrupt concern that eventually was liquidated. Matthews is listed as a director of Nations Flooring.

Stan Brand, former general counsel of the House of Representatives, said that although Hillary Clinton was under no legal obligation to disclose details of the Sakura and other of her husband's engagements, such omissions could hamper her foreign policy work.

"The question will come on a specific case. She will be forced to deal with an issue in a country where a contribution was made. The question will be 'what was the relationship' " between Bill Clinton and the donor, Brand said.

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azajac@tribune.com

Special correspondent Hisako Ueno in Tokyo contributed to this report.

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