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Web Letters | The Nation

Web Letter

TERENCE R. McAULIFFE WRITES 

Your recent article by freelance writers Russ Baker and Adam Federman ("Hillary's Mystery Money Men," November 5) has been swiftly discredited upon its publication. Baker and Federman failed to conduct a basic fact-check before publication, resulting in significant errors about myself and others mentioned in the piece. I wish to draw your attention to several of those errors and concerns.

To begin, there are two inherent problems with the article as it relates to me personally: when I did respond to questions from the authors, the information I provided was not included in the article. When I did not respond to questions from the authors, they simply made up their own facts. (Perhaps this is why the authors circumvented the fact-checking process.)

I won't detail each error across every page of this sloppy piece of journalism; others featured in the piece have already registered their complaints and corrections. Instead, I summarize the major facts that the authors simply got wrong:

I did not receive $18 million for the sale of my Global Crossing interests. Please refer to pages 318-320 in my bestselling memoir What A Party!s

For the record, yet again: in 2005, after I had completed my term as Chairman of the Democratic National Committee, my good friend Hassan Nemazee hired me at Carret Asset Management as Vice Chairman. This was a non-executive advisory role, a role I had played for numerous other companies.

The authors embarrass themselves when they intimate that I intentionally omitted my Carret involvement in my bestselling memoir, What A Party!, and infer that I was trying to conceal my involvement. But had they simply picked up the book in the course of their investigative journalism, they would have seen that the book ends with the day I drove away from the Democratic National Committee.

The authors infer that I "weighed in" on hedge funds in a speech at the 2006 investors' conference for Brean Murray, Carret & Co. I did not give a speech about hedge funds; I gave an overview of the upcoming midterm elections. I give speeches across the US and outside the US, and the topic is always politics.

Mr. Quasha has articulated his many concerns to The Nation already, but I will reiterate several key points involving Mr. Quasha's and my name: I was not hired at Carret by Mr. Quasha. Mr. Quasha never once set foot in Carret's Washington office. Mr. Quasha has never had a role in the Clinton campaign. (If the authors bothered to contact the campaign staff, they would have quickly learned this.)

This article has proven to be an embarrassment for all involved: the authors, who did not so much as bother to fact-check; me and others, who found themselves in an error-laden piece; and The Nation, whose reputation of quality journalism on progressive issues is now soundly tarnished.

Sincerely,

Terence R. McAuliffe    

BAKER AND FEDERMAN REPLY

We made numerous attempts to interview McAuliffe for our article and even sent him a list of detailed questions, but he never responded directly to our repeated inquiries. When we last communicated with his spokesperson, Tracy Sefl, she said, "He's been familiar with the material from the first time we spoke. I don't have answers and I don't think there will be answers." In our article we include the only information that Sefl was willing to provide: that McAuliffe was an adviser to Carret.

Moreover, McAuliffe's claim that we did not contact the Clinton campaign is wrong. As chairman of the campaign, he should know better. Not only did we contact him (through two different offices), but we also exchanged e-mails with Hillary Clinton's traveling press secretary, Jay Carson, and named the key figures in the forthcoming article, including Alan Quasha and Hassan Nemazee.

Contrary to McAuliffe's speculations, the fact-checking process at The Nation was not circumvented. Thus, he can find no errors and instead relies on half-truths.

In his memoir--if you can make it to page 318--McAuliffe does not say how much Global Crossing stock he sold or how much he received for the sale. He does say he put up $100,000 as an "angel investor," adding, "The company went public seventeen months later in August 1999 and the value of my stock skyrocketed. No one ever knew how much of the stock I sold, since as a private investor at the time, I was under no obligation to share that information." In 1999 he told the New York Times that "his initial $100,000 investment grew to be worth about $18 million." A few years later his spokesperson said the Times "created" the latter figure. But in his memoir McAuliffe himself relates an encounter on Fox's Hannity and Colmes when he was asked about the $18 million. McAuliffe replied, "What are you, jealous or something?"

As for mentioning Carret in his book, we thought perhaps McAuliffe would have thanked the company for providing him with an office to write his memoir. It's not clear why McAuliffe reiterates that he was hired by Carret Asset Management in 2005. That is the subject of our story.

In our list of questions to McAuliffe we asked him about his speech at Brean Murray, Carret's small-cap investor conference. According to Business Wire for January 17, 2006, which was citing advanced publicity material from Brean Murray, "Mr. McAuliffe...will be speaking about the current political debate in Washington, DC, and its impact on Wall Street and the status of potential further hedge fund regulation." McAuliffe did not respond to us when we asked about the speech, and Brean Murray, Carret was unable to provide a transcript for us.

Nowhere do we say that Quasha set foot in Carret's Washington office--as if that matters. Regarding his role in the Clinton campaign, we simply say that he contributed the maximum personal donation to Hillary Clinton, $4,600, and that his company hired Terry McAuliffe in 2005.

Finally, if the only demonstrable "error" in the article is that McAuliffe was hired by Carret co-chair Hassan Nemazee, and not Alan Quasha, who is chairman of the company, can it be said that anything of substance has been overlooked?

McAuliffe, in his series of unsubstantiated claims, evades the substance of the article: why Carret hired him and what they hoped to gain by doing so.

Russ Baker and Adam Federman

New York, NY

Oct 30 2007 - 1:14pm

Web Letter

ALAN G. QUASHA WRITES

I am writing with regard to your magazine's misleading and inaccurate article about me entitled "Hillary's Mystery Money Men," written by Russ Baker and Adam Federman.

Although Baker and Federman's factual errors are too numerous to list here, the article contains many obvious misrepresentations:

1. The very premise of your article is wrong. Not only am I not a secret force behind the Clinton campaign, I am not even supporting Hillary Clinton for President. If Mr. Baker or Mr. Federman had bothered to contact Hillary Clinton's campaign, they would have been told that I am neither a fundraiser for the campaign nor a key financial backer. In the words of Howard Wolfson, the Clinton campaign's communications director, "Mr. Quasha is not an advisor, nor in the inner circle, nor a fundraiser for the campaign. In short, Mr. Quasha has no role in this Campaign."

2. I am openly backing Mitt Romney for President and I have even held a fundraiser for Romney in New York. This is a matter of public record your reporters could have found with little effort.

3. The article repeatedly attempts to link or liken me to disgraced political fundraiser Norman Hsu. I have never met Mr. Hsu, never had dealings with him and have never spoken with him. Your use of innuendo to tie me to Mr. Hsu is a disgraceful smear tactic.

4. Your article relies upon unsubstantiated statements by disgruntled former Carret employee Joseph Wozny that I went to former President Bill Clinton's office "quite a few times." In fact, I have never set foot inside President Clinton's office and have never had a "meeting" with the former President.

5. My father, the late William Quasha, did not have a "close friendship" with Philippine dictator Ferdinand Marcos. In fact, they were well-known adversaries. Had your article been really interested in discovering what my late father did, stood for or with whom he associated, it would have uncovered that he led an exemplary life dedicated to his country for whom he served in General MacArthur's staff for four years during World War II and served in the active reserve until retirement (not the intelligence community), fought as a lawyer for the rights of his clients against the tyranny of Marcos's martial law and spent a disproportionate amount of his time devoted to local charities to which, when he died, he left all of his assets.

6. The allegations about Harken Energy are demonstrably untrue from facts in the public record that your writers have intentionally ignored. After I became chairman of Harken Energy, George Soros became a major investor, followed by Harvard University. For years, Harken's largest shareholder and Harken's most influential board member was the representative from Harvard. During my tenure as nonexecutive chairman from 1983 to 1992, the major shareholders of Harken were George Soros, Harvard University and a joint venture I headed, none of whom had ties with anyone nefarious, much less "BCCI" or "a Saudi frontman, foreign dictator or figures with intelligence ties."

7. Although I cannot begin to correct the article's countless other factual errors about Harken Energy, not the least of which is your article's description of Harken's financial record, your suggestion that the Securities and Exchange Commission investigation of George W. Bush was terminated for political reasons is an insult to the commission's staff. The commission's Enforcement Division in the early 1990s was headed by William R. McLucas, a highly respected career SEC lawyer who has never been accused of partisanship or of succumbing to partisan pressures. Similarly, neither the SEC nor any other government agency ever brought an enforcement action against Harken and Harken was never sued, by a shareholder or anyone else, for any wrongdoing.

8. Your writers either misquote Renee Carret or again failed to check the facts. Ms. Carret resigned from Carret Asset Management during the time it was owned by Castle Harlan, not a company with which I am associated. Ms. Carret resigned because of her long-running dispute with Carret's then CEO who, in any event, did not remain at Carret when we acquired it. Because of the problems at Carret, we acquired Carret by buying its assets but did not acquire the assets belonging to Ms. Carret. I have never met Ms. Carret.

9. The article's statement that "Quasha & Co...also appear to be helping the repressive Chinese government keep an eye on its own people" is libelous. Brean Murray is an investment bank that handles many offerings of securities; to say that it is "helping repressive Chinese government" by representing a private company in a small private placement is akin to suggesting that a top-tier investment bank aided and abetted fraud against the United States government because it sold stock for Halliburton. Your writers also ignore the fact that I am not an officer of Brean Murray and had no involvement in the China Security and Surveillance Technology placement. Finally, if Messrs. Baker and Federman had bothered to check China Security's publicly available SEC filings (the stock trades on NASDAQ), they would have learned that most of its revenues come from commercial, not government, sales.

10. Terry McAuliffe was hired by Hassan Nemazee, not me, and he served as a nonexecutive adviser to the firm. One of the few facts your article gets right is that Mr. Nemazee is a well-known fundraiser for the Democratic Party. In fact, my contributions to the DSCC and the Clinton campaign were made at the request of Mr. Nemazee, not Mr. McAuliffe.

11. Carret's Washington office was neither opened to lay groundwork for the Clinton campaign nor closed because Mr. McAuliffe left the firm. Instead, Carret and the other tenants had to vacate the McPherson Building in April because it was being renovated. It is difficult to see how your reporters could have missed this fact, since they claim to have interviewed building tenants.

12. The article's statement that people working in the McPherson Building were unaware Carret was a tenant there is yet another example of sloppy work. The Carret office had a nameplate on the door, the same as the other tenants on the floor. Carret was also listed in the lobby directory just like every other tenant.

13. Your writers' tactics of using vague quotes from former New York prosecutor John Moscow, who unsuccessfully prosecuted cases involving the Bank of Credit and Commerce International, is another example of libelous innuendo. There has never been any legal action tying Harken to BCCI and Mr. Moscow has never had any dealings with me. There is no explanation, except malice, for The Nation's attempt to associate me with BCCI or unnamed and unspecified accused criminals.

I am neither "mysterious" nor "notorious," except in the eyes of people with a political agenda whose primary aim is to hurt others for their own political purposes. As a private citizen who enjoys his privacy, I find your article to be hurtful and shameful, and I would like to think the release of this scurrilous article is an example of poor journalism escaping the attention of The Nation's editors. Even by the low standards of Internet journalism, Russ Baker and Adam Federman's posting is a disgrace.

Very truly yours,

Alan G. Quasha        

 

 

RUSS BAKER & ADAM FEDERMAN REPLY

Alan Quasha is wrong when he says that we did not seek comment from the Clinton campaign. In fact, we contacted the campaign multiple times over a period of months seeking to arrange an interview, without success. We even exchanged e-mails with Hillary's traveling press secretary, Jay Carson, and named the key figures in the forthcoming article, including Quasha and Hassan Nemazee. We also submitted detailed questions to Hillary Clinton's campaign chairman, Terry McAuliffe, via his spokesperson, Tracy Sefl, to no avail.

As for the substance of the article, it is this: a company controlled by Alan Quasha and his partner Nemazee hired Clinton confidant and former DNC chair Terry McAuliffe and employed him until he left to become Hillary Clinton's campaign chairman. In addition, both Nemazee and Quasha contributed large sums to the Democratic Party, and Quasha gave the maximum individual donation to Hillary's campaign--donations to Mitt Romney and others notwithstanding. We dispute Quasha's enumerated claims, many of which are extraneous to the content of the article itself.

Harken's indirect ties to BCCI have been well documented for years. We do not assert that there has ever been any legal action tying Harken to BCCI. Quasha's characterization of John Moscow's "unsuccessfully prosecuted cases" involving BCCI leaves something to be desired: Moscow's office obtained sixteen convictions and $1.65 billion in restitution for the victims of the largest banking fraud in history.

As for Harken's financial record, Platts Energy Economist describes the company as "a modern economic marvel," somehow staying afloat after having accumulated $370 million in losses over a thirty-year period. In 1991 the SEC forced the company to restate its earnings.

We are unaware of any evidence substantially supporting Quasha's claim that his father and Marcos were "well-known adversaries." According to a published report, William Quasha, a Manila-based attorney, was a "close acquaintance" of Marcos. In 1986 William Quasha's statement that the disputed re-election of Marcos was "the least dishonest and least bloody" since Philippine independence from the United States was printed in the progovernment press. The American Chamber of Commerce condemned his defense of the election and of Marcos and issued its own statement deploring his "partisan approach."

Quasha seeks to distance himself from his company's activities in China. Here are the facts: Quasha's company, Carret Asset Management, through an affiliate called Carret Securities, acquired Brean Murray & Co., in 2005. In 2006 Brean Murray, Carret acted as the sole placement agent in a major transaction facilitating the manufacture of surveillance systems to monitor Internet activity in China. House Foreign Affairs Committee chairman Tom Lantos has called American involvement in the Chinese surveillance industry "an absolutely incredible phenomenon of extreme corporate irresponsibility." As we note in the article, Brean Murray, Carret publicly announced its involvement with the video-monitoring activities. In addition to acting as sole placement agent, Brean Murray, Carret was issued a warrant to purchase stock in China Security and Surveillance Technology as compensation for its "financial services."

We did not misquote either Joe Wozny or Renee Carret. Wozny never expressed any animosity toward Quasha or Carret; he volunteered that Quasha and Clinton had met numerous times. As for Renee Carret, we interviewed her on several occasions, both over the phone and in person. She told us that she left the firm at the time of Quasha's takeover, and stated that Quasha called to invite her to lunch, unaware that she had already resigned.

Quasha does not dispute that Carret's Washington office was closed after McAuliffe left. We are well aware of the renovations being carried out at the McPherson building, as the tenants we spoke to had left the building and opened offices elsewhere in Washington. Carret no longer has a Washington office. As to what was written on the door, those who worked on the same floor and who visited McAuliffe and O'Keefe on several occasions did not recall a nameplate or what it said--they only recalled thinking of the office simply as McAuliffe's.

We don't know what to make of Quasha's seeming disavowal of input into his company's hiring of Terry McAuliffe, who was identified as vice chairman of Carret Asset Management in a public announcement in early 2006 by Brean Murray, Carret. Had Quasha responded to our repeated attempts to interview him and to send him detailed questions, he would have had an opportunity to clarify exactly how and why McAuliffe ended up working for Carret.

Russ Baker and Adam Federman

New York, NY

Oct 26 2007 - 2:26pm