CROOKED CLAIMS ABOUT CLINTON

Crooked Claims About Clinton

factcheck.org

January 18, 2008

Four-time convicted felon falsely accuses Clinton in video

viewed by millions.

Summary

In a video that has logged millions of views on the

Internet since early October, Peter Paul, a felon who

helped produce a gala fundraiser for the Democratic Party

and Hillary Clinton's 2000 Senate campaign, makes a number

of false or misleading charges against the presidential

contender and former First Lady. Among them:

o The video gives the false impression that the Clintons

somehow caused Paul to be investigated for securities fraud

as retaliation for a lawsuit he filed against them. But the

investigation -- and Paul's indictment -- came first.

o A lawyer appearing on the video claims that a telephone

conversation between Paul, Hillary Clinton and others shows

that she had knowledge of and perpetrated illegal campaign

activities, when the conversation illustrates no such

thing. It only shows Hillary thanking organizers of a

fundraiser.

o The same lawyer alleges that the actions of Clinton and

those working for her amounted to "the largest fraud in

election funding history," a claim that is absurd. The

campaign was fined for a reporting violation, not "fraud."

And the fine was relatively modest compared with other FEC

fines.

o The video makes deceptive use of an ABC "20/20" clip in

an effort to prove that the Clintons pretended not to know

who Paul was after his criminal past came to light.

Analysis

Last fall, a video [1] attacking Hillary Clinton began

attracting attention on the Internet. A lot of attention,

in fact -- it garnered more than 1.4 million views in its

first month, and is up to more than 3.4 million at this

writing.

Clocking in at about 13 minutes, the piece is a preview of

a longer movie that makes various charges against the

Clintons stemming from a Hollywood fundraiser in 2000, when

Hillary Clinton was running for the Senate. That DVD is for

sale. We analyzed only the preview, because it is readily

available on the Internet and has drawn such a large

audience; we viewed the longer film to make sure we weren't

misunderstanding Paul's charges.

The video reminds us of various "documentaries" that

proliferated in the early years of Bill Clinton's

presidency. "The Mena Coverup," "The Clinton Chronicles"

and others accused Clinton of a range of illegal and

unethical acts. Like many -- we daresay most -- of those,

this video contains a lot of false, unproven and misleading

material. And what it leaves out is often more important

than what it tells us.

The Main Event

The video begins with shots of a glitzy Hollywood

fundraiser, billed as a tribute to President Clinton, on

Aug. 12, 2000. Cher, Diana Ross and Sugar Ray performed.

The glitterati glittered madly. If you were in L.A. for the

Democratic National Convention, opening two days later,

this party was the A-list place to be. The Clintons appear

to be thoroughly enjoying themselves. Sitting with them is

the narrator of the video, Peter Paul, a cohost and

executive producer of the event.

Paul was a thrice-convicted felon at the time, a fact that

wasn't known to the Clintons or aides who were working to

set up the gala, according to a lawyer for the Clintons.

("It was missed" by vetters for the campaign, he told us.)

In the late 1970s, Paul was convicted of conspiring to

defraud the Cuban government of $8.75 million by selling it

a nonexistent shipload of coffee beans, and of possession

of cocaine with intent to distribute. He served about 40

months in prison. (Paul claims that he was part of a covert

government operation when he was arrested for these

crimes.) In the 1980s, he again served time when he

violated parole by lying to a Customs officer (again, he

claims to have been secretly working with the government.)

He chalked up his fourth conviction with a 2005 guilty plea

in a securities fraud case ... but we'll get to that

shortly.

Paul begins his story with the startling declaration that

he decided to help Hillary Clinton and the Democratic Party

as a way to cozy up to Bill Clinton, whom he hoped to

persuade to be a rainmaker for the company he cofounded,

Stan Lee Media, after Clinton left the White House. Rarely

does a contributor so directly and so publicly state that

he opened up his wallet in order to try to get something of

value from a politician.

Paul: I decided, well, maybe I should reach out to Bill

Clinton to work with us and be a rainmaker for the company

when he left the White House. I could accomplish my

objective by becoming a major contributor to the party. ...

My interest in supporting Hillary Clinton was specifically

to hire Bill Clinton.

The video cuts to shots of various fundraising events --

for the Democratic Party, for Hillary Clinton, for Al Gore

-- as well as a photo of Hillary Clinton with her arms

around Paul and his wife. Then Hillary is on stage at the

big gala, thanking Paul and his business partner, Stan Lee,

co-creator of such characters as Spider-Man and the Hulk

when he was at Marvel Comics.

The uber-event -- $1,000 a ticket, $25,000 per couple if

you wanted dinner -- was to benefit New York Senate 2000, a

joint committee consisting of Hillary Clinton's campaign

committee, the Democratic Senatorial Campaign Committee and

the New York Democratic Party. Paul claims on camera that

by producing it, which he later says cost him nearly $2

million, he sealed the deal he wanted: Bill Clinton

promised to work with him after he left office. (Paul has

said in other venues that Clinton was to be paid $15

million in stock and cash for representing the company.)

But Paul offers no evidence in the video to support this

claim. He said in an interview with FactCheck.org that

nobody witnessed his conversations with Clinton about this

and that he had nothing in writing.

A Tangled Web

Three days after the fundraiser, we learn in the video, The

Washington Post ran a short item revealing Paul's felony

record; Hillary Clinton's spokesperson, Howard Wolfson,

first said her campaign would accept no contributions from

him, then two days later corrected himself to say it would

return the single $2,000 check it had received from Paul.

As for Paul's production of the gala, Wolfson said it was

an in-kind contribution.

"The Clintons now had to pretend that they did not even

know who Peter Paul was," says an unidentified man on the

video. Paul told us the man is Doug Cogan, who coproduced

the film with him. Cogan is a conservative Republican and a

San Bernardino County, Calif., commercial real estate

broker who is a believer in Paul's cause.

It's false, though, that the Clintons feigned no knowledge

of Paul. True, they hardly came rushing forward to

volunteer the various contacts they'd had with him. But

they didn't pretend not to know him. Paul's video makes

deceptive use of a clip from an ABC "20/20" segment in

which reporter Brian Ross asks Clinton if she recalls Peter

Paul, and she turns and walks away. First, Paul's video

doesn't tell us that the clip dates from July 2001, which

is almost a year after The Washington Post item. Among many

developments in the interim: Stan Lee Media had collapsed

and Paul was living in Brazil, a fugitive from securities

fraud charges. He had also filed a lawsuit against the

Clintons. In addition, in the fuller version of the "20/20"

story, we see that Hillary Clinton, confronted by Ross,

simply says she won't discuss Paul. She never says she

didn't know who he was.

Paul says on the video that privately, even after The

Washington Post disclosures, the Clintons were still in

touch, and he received from them signed photos from the

gala and thank you notes for putting on the event. That

much is true, if the photos on the Web site dedicated to

Paul's allegations can be believed. As for his claim that,

around that time, Hillary Clinton's "finance director faxed

me a request for $100,000," that's mostly true, but a bit

misleading. The money had been promised by Paul months

earlier, was to be paid in stock, not cash, and was to go

to a group called Working Families, which was supporting

Hillary Clinton, not to Clinton's own campaign committee.

The video then takes us into allegations of business fraud

by Bill Clinton. Cogan and Paul claim on camera that the

president, through an associate, stole away a Japanese

investor who had promised to put $5 million into Stan Lee

Media. The Clinton associate, according to the video, cut a

different deal with the investor that didn't involve Paul's

company. Paul offers no evidence on the video to support

that, and since it is currently the subject of a lawsuit,

we'll let the court decide that one. We can say, however,

that it's quite a stretch to claim that Stan Lee Media was

forced out of business as a result:

Paul: So that began to trigger a meltdown of the stock. The

company collapsed as a result.

Not exactly. It's pretty clear that it would have taken a

lot more than $5 million from any investor to save Stan Lee

Media.

The price of the company's stock had soared in early 2000,

and according to federal prosecutors and a later guilty

plea by Paul, there was a reason for that: Paul was

manipulating the stock, trading it through accounts that

hid his ownership and paying stock promoters to execute

trades that made it appear there was a constant demand for

shares in Stan Lee Media. He also used the pumped-up stock

to borrow millions of dollars on margin from the brokerage

firm Merrill Lynch. Things started to fall apart when Paul

and his colleague started shifting money around in order to

repay the brokerage loans, prosecutors said, and when the

two stopped making payments to the stock analysts, the

share price plummeted. On Dec. 16, 2000, virtually all of

Stan Lee Media's 100-plus staff members were laid off.

Nasdaq halted trading of the stock when the price fell to

13 cents.

By the end of the month, Paul was on a plane to Brazil,

saying he had a business there that needed attention.

Busted in Brazil

In June 2001, while Paul was in Brazil, two things

happened: One, the grand jury in the Eastern District of

New York handed up its charges against him. And two, he

filed a lawsuit against the Clintons and several other

parties. In the video, Paul implies that the lawsuit came

first and that the Clintons pulled the strings of

government to shut him up because of it:

Paul: We had filed a civil suit against the Clintons.

... And then I discovered that I was being investigated

in connection with the misuse of my brokerage accounts.

Paul actually filed suit on June 19, 2001, according to

legal documents, days after his June 8 indictment, and well

after he knew of the investigation that led to it. Besides,

Bill Clinton was no longer president at this point, and the

U.S. attorney that indicted Paul reported to a Republican

Department of Justice, which was part of the Republican

administration.

According to a Justice Department press release that later

summed up the case, Paul "refused to return after the

United States Attorney's Office informed him that he was

the target of a criminal investigation" :

DOJ press release, March 8, 2005: Subsequent to the

filing of first (sic) indictment, Paul again refused the

United States Attorney's Office demand that he return to

this country. Accordingly, the government sought the

assistance of law enforcement authorities in Brazil. On

August 3, 2001, Paul was arrested in Brazil and jailed

pending the outcome of extradition proceedings, which

Paul contested for the next two years.

Campaign Cash Charges

Paul wasn't extradited to the U.S. until September 2003.

Meanwhile, though, his attorneys at Judicial Watch, a

conservative legal group that dogged the Clintons through

the 1990s with a stream of document demands and related

lawsuits, had met with Justice Department officials and

given them some of Paul's documents having to do with the

gala fundraiser. Prosecutors flew to Brazil to meet with

him. They began an investigation.

But they didn't turn up much. The prosecutors secured an

indictment against David Rosen, the Clinton campaign's

finance director, alleging he caused false reports to be

filed with the Federal Election Commission putting the cost

of the gala at about $519,000, when Paul claimed to have

spent $1.9 million to produce it. But the jury acquitted

Rosen. His lawyers argued, among other things, that he had

no motive to underreport the expenses, because the amount

cleared by the Clinton campaign was unaffected by how much

Paul spent. There were no other indictments.

Meanwhile, the FEC, mounting its own enforcement action in

connection with the gala triggered by a complaint by Paul,

couldn't find much to go after, either. It reached a

conciliation agreement with New York Senate 2000 and its

treasurer, Andrew Grossman, in December 2005. The

settlement involved a payment to the FEC of $35,000 and

required New York Senate 2000 to amend its disclosure

report to reflect an additional $721,895 in in-kind

contributions, bringing the total to $1.24 million. As to

Hillary Clinton specifically, the agency voted 5-0 on a

motion to "[f]ind no reason to believe that Hillary Rodham

Clinton violated any provision of the [Federal Election

Campaign] Act or regulations in connection with this matter

and close the file as to her." Two of the votes were from

Republicans and three from Democrats.

That's not part of Paul's video, either.

The Crimes That Weren't

In the video, John Armor, who is identified as a

"constitutional law specialist," makes several false claims

against Hillary Clinton. They're based on a five-minute

videotape of a phone conversation between Paul, Hillary

Clinton, Stan Lee and others in Paul's office, which he

says provides smoking-gun evidence of Clinton's involvement

in "a number of violations of the law" in connection with

the fundraising event. Armor's is not a familiar name to

campaign finance experts. He says on his Web site that he

has represented the campaigns of Eugene McCarthy, John

Anderson and Ross Perot, mainly on ballot-access matters,

and that he has argued cases before the Supreme Court. He

is a sometime-counsel to the American Civil Rights Union, a

group set up at least in part to counter the American Civil

Liberties Union and whose policy board includes former

Attorney General Edwin Meese, former Judge Robert Bork and

the former independent counsel who spent years looking into

various allegations against Bill Clinton, Kenneth Starr.

Armor: First of all, it shows that she had personal

involvement and personal knowledge of the details of

this gala, whereas she has had her representatives, in

the criminal court, in the civil case and before the

FEC, represent that she had no knowledge of this. So

that is suborning perjury. That is obstructing justice.

You hear her describing how she solicited a contribution

by Cher, who was to be one of the main performers at

this gala. Now, what she did there would be legal only

if the services of Cher to come and sing at a concert

are worth less than $2,000. Therefore she was soliciting

an illegal contribution. So that, too, is a violation of

the law. . . .

She says on this tape that Kelly [Craighead, a Clinton

staffer] . . . had fully briefed her, quote unquote, up

to the point of the phone call, and furthermore that she

would keep her informed after that. So there's the

connection of the candidate to this allegedly

independent program. And the FEC law is quite clear, it

is a felony, punishable by up to five years in jail, for

a candidate to be directly involved in this sort of

fundraising activity if it exceeds $25,000. And the FEC

found that it exceeded $1.2 million. It's crime on tape,

very simple.

Let's start by saying the fundraiser itself was perfectly

legal, and these kinds of events -- albeit usually with

less star power -- took place frequently before passage of

the Bipartisan Campaign Reform Act of 2002 . Now we'll take

Armor's charges in turn. First, he says the videotape shows

Clinton "had personal involvement and personal knowledge of

the details of this gala," contrary to the representations

of her lawyers. That's false. Clinton was certainly aware

of the upcoming fundraiser, but all we hear in this phone

call is a politician's routine call scratching under the

chin those who are knocking themselves out for her. The

videotape doesn't show that she knew the kind of "details,"

such as how much it cost to fly Cher in and how that was

being paid for, that would show that she might have known

about underreporting of expenses. What Clinton's lawyers

have maintained is that "she didn't know about the

disclosure issues," says Ken Gross, a former FEC

enforcement chief who practices campaign finance law and

isn't involved in this case. "There's a big difference

between knowing some things about the fundraiser and

knowing what was disclosed on the forms. The former is not

legally relevant to whether she's culpable." Although

Clinton does say that her aide gave her "a full report" on

the event, there's no evidence the aide shared with her

detailed breakdowns of cost.

Next, Armor says that Clinton was soliciting an illegal

contribution because a performance by Cher is worth more

than $2,000, which was the most an individual could

contribute to a candidate in 2000. That's false in two

ways. One, the video provides no evidence that Clinton

solicited anything. She does mention having talked to Cher:

Hillary Clinton: I talked with Cher, and she was just

great. She said she really was excited. And I hadn't

talked to her, so you had to have really done a good job

selling it to her.

Somebody else solicited Cher to appear at the fundraiser.

Clinton may have thanked her for agreeing to perform, but

she did not ask her to do so.

And Cher's performance was not an illegal contribution

anyway -- nor were those by Diana Ross and the other stars

who studded the gala. Under federal law, anyone can

volunteer his or her services to a campaign, and the value

of those services is not counted against federal

contribution limits. Lawyers, graphic artists,

entertainers, accountants, chefs and others do it all the

time.

Armor further charges that the video proves "the connection

of the candidate to this allegedly independent program."

But the fundraiser was never meant to be "independent," a

term which has a very specific meaning in campaign law. It

was to benefit the DSCC, the Democratic Party in New York

and Hillary Clinton's campaign committee, and it was

perfectly legal for representatives of all three groups,

including Clinton, to be involved in planning it.

Later in the video, Armor declares that this was "the

largest fraud in election funding history." That's absurd.

The only finding of anything illegal in connection with the

fundraiser was the underreporting of the cost of the event

by about $722,000, which resulted in a fine of $35,000. To

put this in context, last year alone the FEC collected 10

fines of $100,000 or more. People sometimes go to prison

for campaign fraud.

The Civil (Ahem?) Suit

Paul's lawsuit against the Clintons and others -- a version

of the same one that was filed and dismissed in 2001 when

Paul was a fugitive -- hasn't been faring particularly well

in California state court. Earlier this month, the state

Supreme Court refused to review lower court decisions

dismissing Hillary Clinton and her Senate campaign

committee as defendants in the case, driving what appears

to be the final stake in his effort to keep her roped in.

As to the remaining defendants, including Bill Clinton,

what's left of the suit largely has to do with the alleged

wooing of Paul's Japanese business investor into a separate

partnership. It's possible, though, that Hillary Clinton

could be called as a witness.

Return of the Clinton-Bashers

Many of the individuals and groups helping Paul have long

histories of Clinton-bashing or attacks on other Democrats.

David Schippers, for example, who appears on the tape, is

the former chief investigative counsel for the Republicans

on the House Judiciary Committee during the 1998 Clinton

impeachment hearings.

Another character from that era who is involved in this

story is Lucianne Goldberg. Goldberg rose to prominence as

the person behind Linda Tripp's plan to tape her

conversations with friend Monica Lewinsky in connection

with Lewinsky's relationship with Bill Clinton. Paul told

us that he became friendly with Goldberg via e-mail when he

was in a Brazilian prison (don't even ask) and that it was

Goldberg who "leaked" the unfinished video, which was

intended to be cut down to be a preview, to the media in

October last year.

Paul is now represented by another conservative legal

group, the United States Justice Foundation, after having a

falling-out with, and suing, Judicial Watch. Paul contended

that Judicial Watch used his case as a fundraising tool for

itself while doing little to help him legally, which the

group denies. USJF is behind the Hillary Clinton

Accountability Project (HillCAP), a Web site that features

court documents, news articles and other material related

to Paul's complaints against the Clintons. According to the

Associated Press, the HillCAP Web site is operated by two

conservatives who were instrumental in the Swift Boat

Veterans for Truth site in 2004, Robert Hahn and Scott

Swett.

Earlier this month, Paul asked the FEC to reopen its

investigation into the 2000 fundraiser, claiming the

videotaped phone conversation we mentioned earlier is

further proof of crimes related to the event, and that New

York Senate 2000 has not properly complied with the

conciliation agreement. The agency has not yet acted.

Meanwhile, Paul is still awaiting sentencing on his

securities fraud conviction.

Paul's movie isn't the only one that is lobbing accusations

at Hillary Clinton. Citizens United, another group that

long has been involved in efforts against the Clintons, is

selling "Hillary: the Movie" online and was in federal

court recently over its attempt to run ads for the film in

primary states during election season. The ads contain

clips from the movie, including one of former Clinton

adviser Dick Morris saying that Hillary Clinton "is the

closest thing we have to a European socialist." A three-

judge panel ruled this week that the ads amounted to

electioneering and could be run only with a disclaimer and

only if Citizens United disclosed its donors to the FEC.

Given the passions, pro and con, that Hillary and Bill

Clinton seem to ignite, it's a good bet we can expect more

such films before the election is over.

-- by Viveca Novak

Sources

Bond, Paul. "Stan Lee Media stock trades probed by the

SEC," The Hollywood Reporter, 3 Jan. 2001.

Kuhnenn, Jim. "Anti-Hillary Clinton video finding a niche

on the Internet." The Associated Press, 30 Oct. 2007.

Witt, April. "House of Cards." The Washington Post, 9 Oct.

2005.

"Party Favors; Peter Paul fails in hope to obtain pardon by

donating money to Clinton campaign." ABC News "20/20." 13

July 2001.

Grove, Lloyd. "The Reliable Source." The Washington Post,

15 Aug. 2000.

Grove, Lloyd. "The Reliable Source." The Washington Post,

17 Aug. 2000.

"Past Clinton donor files FEC complaint over 2000

fundraising even in California." The Associated Press, 7

Jan. 2008

Risling, Greg. "Court says Hillary Clinton shouldn't be

defendant in lawsuit." The Associated Press, 16 Oct. 2007

Dorschner, John. "Caught up with comics and the Clintons."

The Miami Herald, 21 Oct. 2001.

Urbina, Ian. "Battling the Clintons, and each other." The

New York Times, 15 Mar. 2005.

Cloud, John. "Lucianne Goldberg: In Pursuit of Clinton."

TIME, 2 Feb. 1998.

"Peter Paul, Co-Founder of Stan Lee Media, Inc., Pleads

Guilty to Securities Fraud." Press Release, U.S. Department

of Justice, 8 Mar. 2005.

Paul v. Clinton, Court of Appeal of the State of

California, Second Appellate District, Division Seven,

decision filed 16 Oct. 2007.

Interview with Ken Gross, 14 Jan. 2008.

Interview with Peter Paul, 16 Jan. 2008.

Apuzzo, Matt. "Ads for anti-Clinton Film must Comply with

U.S. Campaign Finance Law." The Associated Press, 15 Jan.

2008

[1]

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Johnny Judas Jay "the jumpin' jackass jyotishithead" Maharaj wrote:

> Crooked Claims About Clinton

>

> [....]

> The video reminds us of various "documentaries" that

> proliferated in the early years of Bill Clinton's

> presidency.

It also reminds us, Jay, of the various scurrilous and slanderous

allegations about the Clintons that _you_ helped proliferate on Usenet.

"WACO LINKED TO FOSTER'S DEATH"

"DID CLINTON MURDER HIS OWN MOTHER?"

"BLOOD MONEY"

"LIST OF CLINTON-RELATED FATALITIES- CO-INCIDENCE OR CONSPIRACY?"

"DEAD MEN TELL NO TALES"

"THE CLINTON BODY COUNT"

"CLINTON'S MURDER ROOM"

"CLINTON TRAIL OF DEATH"

"HILLARY PROPOSITIONED ME- BODYGUARD"

"HOW THE WHITE HOUSE USED A SEX SCANDAL TO COVER UP REAL CRIMES"

"CLINTON IS A CERTIFIED LIAR"

"DRUG NET DRAWS CLOSER AROUND BILL CLINTON"

"IS THE PRESIDENT A RAPIST?"

"CLINTON AND THE KILLER BLOOD"

"NEED HELP ON STORY, RE: CLINTON, CANADIAN TAINTED BLOOD"

"THE REAL CASE AGAINST BILL AND HILLARY CLINTON"

"IS PRESIDENT CLINTON FIT TO COMMAND"

"'I BELIEVE IN KILLING PEOPLE...' SAYS PRESIDENT CLINTON"

"MONICA, I'D LIKE TO SEE WHAT'S UNDER YOUR SKIRT, THE PRESIDENT SAID..."

and on and on and on...........