HAT TIP: By Matthew Mosk and John Solomon
Washington Post Staff Writers
Saturday, May 26, 2007; A01
For the past four years, the Clintons have jetted around on Vinod Gupta’s corporate plane, to Switzerland, Hawaii, Jamaica, Mexico — $900,000 worth of travel. The former president secured a $3.3 million consulting deal with Gupta’s technology firm. His presidential library got a six-figure gift, too.
Gupta, whose big donations to the Democratic Party earned him a Lincoln Bedroom overnight when Bill Clinton was president, has emerged as a key benefactor of Clinton’s post-presidency — and Hillary Rodham Clinton‘s presidential candidacy.
Gupta’s generosity toward the Clintons has proved so controversial within his firm — a major provider of database-processing services — that it prompted a shareholder lawsuit complaining that hiring the former president was a “waste of corporate assets.”
The dispute over Gupta’s bankrolling of the Clintons offers new detail about how successfully Bill Clinton has leveraged the inner circle of donors he cultivated during his tenure in the White House to his personal financial benefit since he left office. In addition, it suggests the degree to which Hillary Clinton’s political career is also benefiting from those connections.
In the lawsuit, filed this year in Delaware, some investors in the company, InfoUSA, challenged Gupta’s decision to direct his firm to pay the former president the consulting fees for the “extremely vague purpose” of providing his “strategic growth and business judgment.”
The Clintons are not parties to the lawsuit, nor are they accused of any wrongdoing. In fact, the lawsuit refers only to a “former high-ranking government official” and his wife. But company officials, shareholders and aides to the Clintons confirmed that they are the couple in question.
The jet travel for the Clintons was charged to the company as “business development” expenses, the lawsuit said. The company jet took them to vacation spots, whisked the former president to an international conference in Geneva and to a commemorative speech in Oklahoma City, and shuttled Hillary Clinton to a campaign fundraiser in New Mexico.
The Clintons complied at the time with federal law by reimbursing Gupta for a portion of the costs for the flights Hillary Clinton took to political and other events. The Clintons do not have to reimburse InfoUSA for any of Bill Clinton’s travel, and they had to pay only the equivalent of first-class airfare for her travel, a fraction of the actual cost.
Jay Carson, a spokesman for the former president, declined to discuss the consulting arrangement. Carson described Gupta as a “longtime friend and supporter.”
Stormy Dean, InfoUSA’s chief financial officer, confirmed the flights and that payments went to Bill Clinton but said that the company believes the shareholder complaints are without merit. “Our position is that these expenses are legitimate business expenses,” he said. Gupta, who was traveling and could not be reached for comment, defended his company’s use of its corporate jet in a 2005 letter to the board of directors. “Every flight and its business reason are documented,” he wrote.
Gupta is a well-known figure in the high-tech world in India who met Bill Clinton in the mid-1990s and quickly became a generous patron. He and his company donated at least $1 million to help underwrite a lavish millennium New Year’s Eve celebration at the White House and on the Mall, and he paid the former president $200,000 to deliver a speech to InfoUSA executives in Papillion, Neb.
Gupta also gave a six-figure gift to the Clinton Presidential Library in Little Rock, $250,000 to the former president’s global charity, and more than $220,000 to the Democratic Party during Hillary Clinton’s 2000 Senate campaign. In December, Gupta gave the maximum $5,000 to the senator’s political action committee, which was helping to lay the groundwork for her 2008 presidential bid.
Gupta has enjoyed his own benefits from his relationship with the Clintons. Bill Clinton offered him two diplomatic posts — as U.S. counsel general to Bermuda and as U.S. ambassador to Fiji — that he did not take. The president appointed him to the prestigious John F. Kennedy Center Board of Trustees during his last week in office.
Both Bill and Hillary Clinton agreed to lend their names to technology schools that Gupta financed in rural India.
Gupta, who grew up in dire poverty in India, has said publicly that he relished his relationship with Bill Clinton. Crew members of InfoUSA’s 80-foot yacht “American Princess” said Gupta spoke often of the former president and placed a photo of Clinton in the boat’s living quarters. In a 2000 interview with The Washington Post, Gupta described the thrill of crawling into bed in the Lincoln Bedroom. He said he called his mother to tell her, “I’ve come a long way.”
Founded in 1972, Gupta’s firm InfoUSA is now valued at $600 million and says it provides database marketing and processing services to more than 4 million customers.
The payments to Bill Clinton and the jet travel, along with other Gupta spending, attracted the attention of dissident investors in InfoUSA in 2005. Three investor groups sued the firm in a Delaware court, alleging that the expenses were unrelated to the business.