CONFLICT OF INTEREST: BURSON – MARSTELLER & HILLARY’S ALLIANCE
By DICK MORRIS & EILEEN MCGANN
Published on FoxNews.com on October 19, 2007.
“Running a presidential campaign is good for business.”
Mark Penn, Hillary Clinton’s chief strategist and the Worldwide CEO of international public relations/ lobbying firm Burson-Marsteller, wrote those telling words in his confidential internal corporate blog.
Given the breadth of his company’s representation of special interests, Penn’s assertion may be the understatement of the year. The number of Burson-Marsteller clients – both corporations and foreign governments – that will likely try to influence the next administration is staggering.
And so is the potential for a serious conflict of interest. As a campaign strategist, Penn meets and speaks constantly with both Clintons and with other key policy advisors. He is in a unique position to influence what the candidate supports or opposes – not only during the campaign but also later on in a future Clinton administration. And he has ample opportunity to weigh in on issues that are vital to Burson-Marsteller’s clients.
But neither Penn nor Hillary Clinton seems to see any problem there – even though Penn has already showed poor judgment in this area.
During Bill Clinton’s second term, while Penn was the president’s chief political strategist – with unfettered access to the President and First Lady, his polling firm, Penn & Schoen, contracted to lobby the Clinton administration on behalf of a bank operated by several Central American countries – for a half million dollar fee. (The firm had never registered as either a lobbyist or foreign agent before.)
Burson-Marsteller ultimately bought Penn & Schoen and Penn became its head honcho.
The firm’s publicly known clients are a veritable “Who’s Who” of corporations in crisis, as well as companies and foreign governments looking for favors from Congress and the White House.
Just look at recent Burson-Marsteller clients that have been in the news in the past two weeks.
BLACKWATER – the hired guns in Iraq.
Blackwater’s CEO, Eric Prince, hired Burson’s lobbying subsidiary, BKSH, to prep him for his Congressional testimony – helping him to glibly explain why the civilian cowboys who work for him have been involved in 195 shooting incidents. After news reports about the controversial representation, Burson-Marsteller ran screaming from Blackwater, describing it as only a “temporary” engagement with no involvement by Penn. And the Clinton campaign affirmed its support for Penn.
While Blackwater is certainly no Whitewater for Hillary Clinton, it is yet another reminder of the ethical imbroglios that dogged her in the White House and raises serious questions about Penn’s dual roles as strategist for the potential next president and adviser to corporations and governments who have ongoing big business in Washington.
Then there was Countrywide Financial, the beleaguered sub-prime mortgage lender that is desperately trying to save the company and clean up its image. And Microsoft – trying to stop the Google/Doubleclick merger. Throw in Armenia, (trying to pass a Congressional resolution accusing Turkey of genocide) and The Peoples Party of Pakistan (working to bring Bhalizar Bhutto back to power in Pakistan). It’s been quite a week!
You get the picture: They’re everywhere!
Penn is often compared to Karl Rove, but there’s at least one big difference: When Rove became Bush’s chief strategist, he sold his consulting business. Penn refuses to even take a leave of absence. Although he claims to have no involvement in the firm’s day-to-day business, published internal e-mails suggest otherwise. And, Penn demonstrated his blatant lack of sensitivity to conflict of interest issues during the last Clinton administration.
In October 1998, while Penn was the White House chief political strategist, he registered his polling firm, Penn & Schoen, as an agent for the Central American Bank for Economic Integration, operated, and controlled by Guatemala, Honduras, El Salvador, Costa Rica, and Nicaragua with Mexico, Taiwan, Argentina, and Colombia as additional shareholders.
In plain English, a number of foreign governments, seeking to persuade the President of the United States to adopt legislation in their economic interest, paid the president’s trusted adviser to make their case in the White House.
Question: Did the president know this and permit it? Did Hillary know? Is this kind of dual role okay with her? Will she permit it if she’s elected president?
Because that’s not how Bill Clinton used to operate. In his first term, the former president required all consultants with regular access to either him or the White House staff to file a financial disclosure form with the White House counsel’s office – to avoid even the appearance of conflicts of interest.
So, what happened to that sensible policy?
Apparently, it went out the window.
According to Penn’s hand-written filings with the Justice Department, he was the only partner working on the contract that required his firm to “lobby the [Clinton] Administration” and”encourage” it to adopt a NAFTA-like trade bill for Central America as “a primary legislative priority.”
And what is it that did Penn inside the White House – for half a million dollars – to advance the foreign bank’s agenda?
He reports that in November 1999, he made two telephone calls to Maria Echaveste, the White House deputy Chief of Staff “relating to visit of member countries to the U.S.” That’s it.
Not surprisingly, Penn’s lobbying skills were no longer needed once Clinton was gone. Penn’s handwriting indicates that the contract expired on January 1, 2001 – days before Clinton left office.
Now Penn is deeply immersed in the lobbying world. Burson-Marsteller is sought out by clients who are well aware of his close relationship with the Clintons.
Take the case of the Colombia Free Trade Agreement. In late March, Bill Clinton traveled to Cartagena for the 80th birthday tribute to Nobel Prize winner Gabriel Garcia Marquez, where he spoke to Colombian president Alvaro Uribe about the difficulties in passing the agreement. Eager to help, Bill himself called several Democratic Congressmen. And, coincidentally, within days, Burson-Marsteller and two of its subsidiaries, BKSH and Penn & Schoen, signed on to lobby for the Colombian Embassy for $300,000.
Other countries come calling, too: Earlier this year, Burson-Marsteller closed a $250,000 polling and lobbying and image making project for former Prime Minister Bhutto’s People’s Party of Pakistan, which opposes the current Musharaaf government. Bhutto arrived back in Pakistan this week, after an eight-year exile.
And in June, Burson signed on with the Abu Dubai Investment Authority for $802,250 – in Bill Clinton’s favorite Arab country, the U.A.E.
Armenia was another big contract for Burson.
According to Justice Department filings, Burson-Marsteller signed a contract with a Stepan Martirosyan, a member of the U.S. Armenian community in Glendale, California to: “share information with the U.S. government, regarding the policies and actions of the government of Armenia as well as facilitate meetings for [Prime] Minister Sarkisian.”
At the same time that Burson-Marsteller was lobbying for the Armenians and Penn was actively involved in her presidential campaign, Hillary Clinton became one of the 32 Senate co-sponsors of the controversial Congressional Resolution to declare that the Turkish killings of hundreds of thousands of Armenians from 1915 to 1923 – at the end of the Ottoman Empire – was genocide.
Without a doubt, the key policy of the Armenian government is to get the genocide resolution passed. The Armenian Prime Minister is in Washington this week for meetings with Congress and key members of the Administration.
Although there has been strong support for the Armenian Resolution, it suddenly ran into strong opposition from the Turkish Government, one of our most important allies in the Iraq War. Turkey permits the U.S. with use critical air fields.
Eight former Secretaries of State – Democrats and Republicans – have written to Congress, urging defeat of the Resolution because it would “endanger our national security interests.” And three former Secretaries of Defense have warned that Turkey might decide that the U.S. can no longer use its air bases.
But Hillary is still sponsoring the Resolution. Wonder why?
The Armenia contracts paid Burson-Marsteller close to a half million dollars.
Penn is not paid anything at all by the Clinton campaign. His compensation at Burson-Marsteller is directly tied to the performance of the company, which is booming.
Running a presidential campaign may, in fact, be good for Penn’s business, but, ultimately, it won’t be good for Hillary Clinton’s candidacy.
Edwards and Obama have severely criticized her for taking lobbyists money. It won’t help if her strategist continues to oversee a lobbying firm.
Last year, Burson-Marsteller’s parent company, WPP, raked in more than $53 million in fees from its various U.S. lobbying affiliates. (It’s been gobbling up D.C. lobbying firms in the past few years.)
Interestingly, when Penn contributed to Hillary’s presidential campaign this year, he supplied a Miami Beach, Florida address instead of his home address in D.C. He also listed his employer as Penn & Schoen – not Burson-Marsteller – where he is employed in Washington as its “Worldwide CEO.”
Can you think of a good reason for that? Could it possibly be so that anyone searching for political donations by employees of lobbying firms would skip over it and think it a different Mark Penn who lives in Florida?
Or maybe he just forgot that he lives in Washington, D.C. and didn’t remember that he works at Burson-Marsteller.
Given the unmistakable merger of his corporate and political work, its time for Penn to make a choice and follow the example of Karl Rove – and end either his corporate work or his political activity. They’re a dangerous mix.
(NOTE: Burson-Marsteller is a major player in the world of corporate and political spinning, with offices all over the globe. A short list of clients are as followed: Phillip Morris, Occidental Petroleum, Bristol-Meyers, Entergy (nuclear power), Lockheed Martin, Texaco, AT&T, Allergen (makers of Botox), Greece, Taiwan, Cyprus, Virginia Tech, Doha16. Qatar (to try to get the 2016 Olympics there), Comcast, Sony Ericcson, Ikea, the National Fisheries Institute, Visa International and many, many others.
In the past, the company has also represented the Chinese National Offshore Oil Co (CNOOC) (Burson operates over one hundred offices – including four separate offices in China), the Russian Government Press Office, Haiti, Nigeria, Saudi Arabia, and Ahmed Chalabi, the disgraced president of the Iraqi National Congress who pushed for the overthrow of Saddam. But most of the firm’s clients remain secret: Unless direct lobbying is involved, there is no disclosure requirement.)