Bill Clinton's $700,000 Stock Windfall; Company Linked to Felon, China

The Washington Times (Washington, DC), March 7, 2008 | Go to article overview

Bill Clinton's $700,000 Stock Windfall; Company Linked to Felon, China


Byline: Jim McElhatton, THE WASHINGTON TIMES

The spring before his wife began her White House campaign, former President Bill Clinton earned $700,000 for his foundation by selling stock that he had been given from an Internet search company that was co-founded by a convicted felon and backed by the Chinese government, public records show.

Mr. Clinton had gotten the nonpublicly traded stock from Accoona Corp. back in 2004 as a gift for giving a speech at a company event. He landed the windfall by selling the 200,000 shares to an undisclosed buyer in May 2006, commanding $3.50 a share at a time when the company was reporting millions of dollars of losses, according to interviews.

A spokesman for the William J. Clinton Foundation declined to identify the buyer who was willing to pay so much for a struggling company's stock, saying only that the transaction was handled by a securities broker. It occurred seven months before Sen. Hillary Rodham Clinton announced her bid to run for the 2008 Democratic presidential nomination.

The spokesman, Ben Yarrow, declined last week to say whether Mr. Clinton knew about the Chinese government's connection to Accoona or the felony fraud conviction of one of the company's founders.

"President Clinton gave a speech; he did not endorse a product," Mr. Yarrow said.

The $700,000 capital gains was listed on the tax returns of Mr. Clinton's foundation that were reviewed by The Washington Times.

The lack of disclosure about the buyer and the general activities of former presidents' foundations troubles some ethics experts.

Sheila Krumholtz, executive director for the nonpartisan Center for Responsive Politics, which studies political money and ethics, said even though the law doesn't require former presidents to disclose donations and stock transactions to their foundations, they should do so to avoid the appearance that money was buying special access.

"We're in a unique period where the wife of a former president is running for the job of the son of a former president," she said, referring to Mrs. Clinton and the current President Bush.

Accoona offered its own Internet search engine as a rival to giants Google and Yahoo, and Mr. Clinton was the keynote speaker at the company's Dec. 6, 2004, launch in New York. He even joked about the price of the stock that he was given that day as compensation for his speech.

"So I hope you get a big run-up in your stock price, I hope you have a great time doing it, but remember you're doing something profoundly good for humanity and the future as you do," Mr. Clinton told Accoona executives.

Accoona, based in Jersey City, N.J., was co-founded by Armand Rousso, who as of last year held more than 14 percent of the company's shares. He pleaded guilty in 1999 to federal money laundering and other charges in a fraud investigation in New Jersey.

After being jailed for 19 months and cooperating with government investigators for several years, he was sentenced to probation in 2006 and was barred from working in the securities industry.

Rousso "does not get involved in the management of this company; if he did, I would not be here," Accoona's chief executive, Valentine J. Zammit, said in an interview. "I didn't come on board to be told what to do. ... We've made a lot of changes

The China Daily Information Co., or CDIC, a subsidiary of the Chinese-controlled newspaper China Daily, holds nearly a 7 percent stake in Accoona, records show. Mr. Zammit said CDIC also has no management role.

Still, the company has touted its ties to China to potential investors.

"CDIC's market knowledge and its parent's ownership by the Chinese government gives us an advantage over companies that do not have such a relationship," the company said in a prospectus filed with the U.S. Securities and Exchange Commission (SEC) last year. …

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