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Investigative Report: Another Clinton Scandal Coming?
Insight Magazine ^ | 8-13-04 | Paul M. Rodriguez

Posted on 08/13/2004 11:19:50 AM PDT by Thanatos

Investigative Report: Another Clinton Scandal Coming?

Posted August 13, 2004

By Paul M. Rodriguez

Hillary Clinton is flying high within the Democratic Party as a marquee star that many hope will launch a presidential run in 2008 or 2012 or join up as a vice presidential contender. But previously unknown federal documents outlining potentially serious election law violations could spell trouble for the junior senator from New York and some high-fliers in the Democratic Party.

At the same time, according to legal and federal law enforcement sources who have spoken to Insight on condition of anonymity, the failure to pursue alleged wrongdoing by Clinton's senatorial campaign in 2000 and among a variety of party and White House officials involved in fundraising at the time raises questions about the integrity of the Justice Department which has failed to bring indictments against key players in Hollywood, Washington, New York and Florida despite mounting evidence.

At the center in much of this legal thicket is Peter Franklin Paul, a colorful figure and former international lawyer who spent time in jail in the 1970's for cocaine possession and an elaborate scheme that scammed Cuban dictator Fidel Castro out of $8 million. Paul subsequently became a successful businessman in Miami, Fla., and then in Los Angeles, Calif., where he co-founded along with legendary comic book creator Stan Lee the Stan Lee Media company (SLM).

Paul was indicted in 2001 on a variety of securities and bank fraud charges both in California and in New York stemming primarily from his borrowing money on margined SLM stocks that he used to pay for elaborate luncheons, dinners and an extravagant Hollywood tribute to President Bill Clinton that was tied to a major fundraising event for Hillary Clinton's senate campaign in the summer of 2000.

In all, according to Paul and extensive documents reviewed by Insight, he provided in-kind contributions in excess of $1.7 million to Clinton's campaign that never has been properly accounted for in her Federal Election Commission (FEC) filings. Clinton and her campaign have denied receiving such large contributions from Paul.

Newly obtained documents by Insight raise thorny questions about such denials and separate allegations of a federal cover up at the Justice Department. One such document is an FBI special agent's affidavit from May 2002 that outlined alleged wrongdoing by Clinton's senatorial campaign back in 2000.

A second document is a Justice Department memorandum this June to Federal District Judge Leonard D. Wexler that bolsters the FBI agent's charges from 2002 but adds a surprising twist involving an alleged bribe to Bill Clinton while he was president that certainly will be unwelcome news among many Democrats who have hoped that scandals involving the Clintons were long ago over.

Insight has investigated many of these issues in extensive investigative reports over several years, including the odd omission by federal officials in the indictments concerning the nearly $2 million Peter Paul donated to Hillary Clinton - donations and fundraising activities that, ostensibly, are the root causes for his legal troubles.

The 22-page FBI affidavit, which was signed May 30, 2002, by Special Agent David C. Smith, was in support of a search warrant on a large storage locker rented in Tarzana, Calif., by Paul. The existence of the search warrant was reported by Insight in late 2002, including the FBI's search for records of any type related to Hillary Clinton's campaign.

At the time and ever since, the Justice Department has declined to discuss the reasons behind the search warrant's references to the Clinton Senate campaign leaving Paul as virtually the sole source on claims he had proof at the storage locker that he was the major supporter of various Clinton fundraising events in 2000.

As part of a very public strategy to promote Stan Lee Media, according to Paul in numerous interviews with Insight and in voluminous filings in federal courts and with the FEC since his indictments (one of which was superceded in early August 2004 for a trial in New York), he cut a deal with political aides in the national Democratic Party and Hillary Clinton's campaign to host a variety of political events at expensive restaurants and amongst Hollywood's elite.

Paul also planned, hosted and paid for the bulk of an elaborate star-studded Hollywood gala on behalf of Bill Clinton that was part of a big fundraising event for Hillary Clinton when the Democratic Party was holding its national convention in Los Angeles back in 2000. Not only was Paul publicly thanks by both Clintons for each of these events but also was thanked by Bill, Hillary and even Chelsea Clinton in personal thank you notes.

To pay for all these costs, according to Paul and former Stan Lee Media employees, he borrowed large sums of money on margined SLM stocks - a promotions gamble he was sure would help convince Bill Clinton to become a board member of Stan Lee Media after leaving the White House.

In fact, according to those previously interviewed by Insight and who are not accused of any crimes, Paul often bragged that his contacts with high-level Democratic operatives who recommended his extensive political in-kind contributions would pave the way to get Bill Clinton on the SLM board.

Moreover, several sources also said that Democratic officials and operatives who used SLM's offices to help plan both the gala and the Clinton fundraising events openly spoke about how party officials were grateful for Paul's help and that even President Clinton said he would get some of his friends to invest in Stan Lee Media.

Prosecutors in the Central District of California (Los Angeles) and in the Eastern District of New York have never publicly - either in statements or in the various indictments - mentioned any of these political deals or Paul's substantial in-kind contributions. In fact, prosecutors have said that all of Paul's alleged illegal activities were for his own personal gain and that of his family.

Paul has denied that he is guilty as charged and says he even tried before he was indicted to blow the whistle on wrongdoing at Stan Lee Media as well as a failure by Hillary Clinton to properly disclose his contributions.

The root cause for much of Paul's legal troubles appears to have started once his attempts to recruit Bill Clinton began to run into brick walls, demands for additional contributions to DNC causes kept piling up, and a Washington Post story in late August 2000 uncovered his past criminal convictions.

Once that story ran, both Paul and former associates claim, he publicly was dropped like a hot potato by the Hillary Clinton campaign which also returned a $2,000 contribution he had made. However, according to Paul and former associates, behind-the-scenes contacts continued with DNC officials who continued to seek additional political contributions, as well as the Clinton campaign. The White House even arranged a private tour of Air Force One with President Clinton and then-California Governor Grey Davis weeks after the public distancing from Paul after the Washington Post story ran.

As political pressures mounted through the fall of 2000, according to Paul, troubles at Stan Lee Media were beginning to mount as a result of bad business decisions by his partners, secret stock sales, margin loans and alleged corruption that led to a crash of SLM's stock price. Ultimately, the company crashed and burned, according to the federal indictments, due to Paul's alleged illegal actions.

Initially, according to Paul and his lawyers at Judicial Watch, he didn't think that business troubles at SLM would lead to his indictment but to the indictments of corporate officers, audit committee members and outside advisers of Stan Lee Media as well as some lawyers who had set up the various stock deals that Paul currently is being charged with orchestrating.

In fact, such hopes seemed bolstered by secretly recorded government wiretaps whose transcripts of conversations between Paul and an alleged government informant suggested it was not Paul whom the government might go after but others. Insight has obtained these transcripts.

Confidential FBI 302 reports by a senior special agent in the New Jersey Federal Crime Task Force that start in February 2001 and continuing at least to the end of that March seem to back up many of Paul's claims that he was trying to blow the whistle on corrupt practices at Stan Lee Media and, separately, false FEC filings by the Clinton campaign. Copies of some of these confidential FBI 302 reports were obtained by Insight.

In addition to these memorialized attempts by Paul to work with the FBI without counsel, Paul subsequently retained Larry Klayman at Judicial Watch to formerly document such proffers to federal prosecutors, including allowing high-level Justice Department officials who assigned separate investigators to conduct wiretaps from Paul's Brazilian residence on a key player apparently working undercover for the FBI who allegedly helped to manipulate the demise of Stan Lee Media.

Paul also tried several times to have the Clinton campaign correct its FEC records by offering to share his own records detailing his nearly $2 million in contributions plus separate SLM stock transfers on behalf of the campaign to a state PAC in New York. Not only did the Clinton camp decline to correct the record, so did the FEC.

None of these attempts to reach out and cooperate with federal investigators has ever been mentioned in public statements or court filings by federal prosecutors. Neither has there been any mention of Paul's political gift giving in any of the indictments nor in the indictments of four others also charged with banking and securities violations.

Over the past three years, which have included a couple of years in Brazilian jails pending extradition to the United States that got bogged down in international paperwork, Paul has said that if he is guilty of any wrongdoing that doesn't excuse the government from going after others who, by the standards used against Paul, also should be charged -- despite political fall out involving some important political people.

The more he has pushed his own private cause against the Clintons, however, the more say his Judicial Watch lawyers that federal prosecutors have hardened their position not to deal with Paul despite senior Justice Department officials' assurances they would help given his cooperation with them on various matters, including a probe on an apparent FBI confidential operative gone bad.

This FBI operative, according to Judicial Watch, is Stanley Myatt, a Miami businessman with reputed ties to organized crime who also has been a valuable government undercover operative working with the Customs Service, the FBI, the Bureau of Alcohol, Tobacco and Firearms, the Secret Service, various federal crime task forces and even the CIA. Myatt has declined to speak with Insight but has told others that he is an innocent man.

In June, Robert Sticht, one of Paul's New York defense lawyers, argued in a little-noticed motion that the indictments against his client should be thrown out because of "outrageous government conduct" against Paul that includes the pivotal role played by Myatt in both the demise of SLM and the faulty indictments of Peter Paul.

"Since the early 1970's," Sticht said in his motion, "Myatt has been working as an informant, covert operative, and agent for various government agencies...He has been involved in the government's biggest cases including ABSCAM, BCCI, and the prosecution of successive Philadelphia mob bosses. Investigations Myatt was involved in the past were 'run' by the FBI in a terribly uncontrolled manner, resulting both in breaches of regulations and guidelines by agents, and of the law by the informants."

"While acting on behalf of the government, under cover of investigations, Myatt has been looting public companies," Sticht claims. "The FBI does not pay Myatt for his information and/or investigations. The arrangement is such that Myatt makes his living looting public companies as an agent of the government. In exchange, the FBI makes criminal cases."

It is because of such previously unrevealed allegations involving Myatt that, Insight's sources have claimed, both the Criminal Division and Public Integrity Division at the Justice Department, along with the Office of the Inspector General have been holding secret meetings with Paul's lawyers for the past three years and agreed to launch a behind-the-scenes probe of Myatt and his alleged FBI handlers. This is one reason for the federal wiretaps back in 2001.

In an unrelated Florida court case going back several years involving a defendant who allegedly tried to kill Myatt, the South Florida businessman revealed in a secret in-camera hearing captured on tape that he had worked over the years as a confidential informant for several federal agencies, Insight previously has confirmed.

This is the same Myatt that Paul has claimed pressured him to secretly transfer large blocks of SLM stock to Myatt for financial help. And it's the same Myatt caught on the Justice Department's wiretaps talking with Paul about the then-secret N.J. Federal Crime Task Force probe involving Stan Lee Media, problems others were causing the company, and what the N.J. Federal Criminal Task Force was investigating.

Unbeknownst to both federal prosecutors and the Justice Department, the Internal Revenue Service had opened a local criminal probe in South Florida involving Myatt and many of his companies, including several holding companies offshore. This IRS criminal probe quickly expanded to include Myatt's dealings with Stan Lee Media and questionable stock sales, as well as secret stock transfers by others at Stan Lee Media that were traced in some cases to offshore accounts involving not only Myatt but also some people affiliated with SLM - people that to date have not been charged with any crimes.

Once the Justice Department became aware of the independent IRS probe, according to Insight's sources, the investigation of Myatt has been controlled by the department's Criminal Division because of its "extreme" sensitivity and impact on other investigations still underway, including appeals by some mobsters put away allegedly with Myatt's help in various sting operations.

In the past year, as Insight, the Los Angels Times and Vanity Fair have reported, the IRS not only has expanded its criminal probe involving Myatt to include allegations of wrongdoing at SLM, but so too did the Federal Election Commission and a federal grand jury probing irregularities by both the Hillary Clinton campaign and operatives in the Democratic Party.

Though Peter Paul has not been interviewed by the FBI, the SEC or the IRS he recently has been interviewed by the FEC for 12 hours. The SEC also has conducted extensive interviews with a former associate of Paul's now serving up to seven years in jail for similar charges now pending against Paul.

Aaron Tonken, himself a once high-flying operative in the Democratic Party since convicted of separate fundraising schemes affiliated with some California charities and Hollywood A-list personalities, also has been interviewed extensively by government agents. Tonken is alleged to have played a significant role in the Peter Paul-connected fundraising events on behalf of the Clintons back in the summer of 2000.

In his May 30, 2002, affidavit in support of the search warrant on Paul's storage facility in California, FBI Special Agent Smith outlined the various allegations involving the Clintons' political and campaign activities:

"In addition to the foregoing, a federal grand jury in the Central District of California is continuing to investigate allegations of violations of the federal campaign finance statues, and of false statements to federal government agencies. In particular, on August 12, 2000, while the Democratic National Convention was underway in Los Angles, [PETER] PAUL was responsible for hosting a fundraising event known as 'THE HOLLYWOOD GALA SALUTE TO PRESIDENT WILLIAM JEFFERSON CLINTON' ("the event"). The event was a fundraiser for the benefit of New York Senate 2000, the campaign organization that supported the United States Senate Campaign of Hillary Rodham Clinton.

"The event's costs exceeded $1 million, but the required forms filed by New York Senate 2000 with the Federal Election Commission ("FEC") months after the event incorrectly disclosed that the cost of the event was only $523,000. It appears that the true cost of the event was deliberately understated in order to increase the amount of funds available to New York Senate 2000 for federal campaign activities."

Agent Smith's sworn declaration also mentions interviews he and FBI Special Agent Kevin J. Horn conducted with several people with first hand knowledge of behind-the-scenes activities associated with the fundraising events, including an apparently false FEC report that SLM, Inc. donated $366,000 to the Clinton campaign - a report that was filed by her campaign committee and, to date, has never been corrected.

Curiously, throughout Peter Paul's three-plus years under federal scrutiny and subsequent indictments and incarceration, federal officials have said little to nothing about their interest in the Hillary Clinton campaign matter. And yet, according to a February 27, 2002 letter from then Assistant U.S. Attorney David Z. Seide to the custodian of records at Blue Room Events in Los Angeles, federal prosecutors at one time were probing deeply to uncover evidence of possible wrongdoing by the Clinton campaign.

A federal grand jury subpoena to Blue Room Events, which provided many of the services to the Clinton gala and fundraiser, outlined requests for records specifically naming Clinton-related staff involved in the events. Insight has obtained this subpoena.

Paul has long contended that the government wants nothing to do with the Clintons or worse, has just covered up what it has found to avoid political fallout that surely would follow were illegal acts prosecuted.

Curiously, federal agents and prosecutors have routinely labeled Peter Paul a liar (among other things) when responding to his seemingly outrageous claims about conspiracies, Myatt, corruption at SLM by company officers and directors, and fundraising irregularities at the Hillary Clinton campaign committee.

Yet, according to the newly obtained FBI affidavit and other documents, it appears some within the FBI and the Justice Department felt there was enough evidence of political wrongdoing to engage a federal grand jury to check out the allegations. What's happened since is unclear involving the FBI and Justice but for certain the SEC, the FEC and the IRS have jumped into the fray.

When asked for comment, the only thing a senior Justice Department official would tell Insight is that if anything does emerge that is illegal involving the Clintons, the senator's campaign, Democratic Party operatives and others affiliated with Stan Lee Media then these will be pursued to the fullest extent of the law. And no, the official said, there are no conspiracies to spike such probes.

Then how, Paul's lawyers ask, does such assurances jive with a July 30, 2004, letter to Judge Wexler from a Catherine L. Youssef, an assistant U.S. attorney in the Eastern District of New York. She said the government was prepared to offer evidence that Peter Paul not only exploited his former company for personal gains but also to underwrite his contributions to the Hillary Clinton campaign, to borrow money from a partner that he "explained that he needed ... for a party for Bill and Hillary Clinton," and that he also "sought to bribe William J. Clinton in order to obtain a presidential pardon for his three prior felony convictions."

Youssef also wrote the judge that "Paul sought to effect this bribe by paying the bulk of the costs of certain fund-raising events for Hillary Clinton's New York Senatorial campaign, by making gifts of jewelry and other curios to Mr. and Mrs. Clinton and by offering to install Mr. Clinton on the board of directors at SLM, after Mr. Clinton left his office as President of the United States."

"In addition," the prosecutor wrote, "to conceal from federal authorities that a convicted felon (i.e. Paul) was making large 'soft money' contributions to the Clinton campaign, Paul paid for the costs of certain fund-raising events using SLM and Stan Lee himself as conduits."

To those familiar with Peter Paul and the political events he underwrote in the summer of 2000, the government's claim that he was concealing his involvement seems ridiculous given the bevy of press reports at the time, Paul's own bragging in public about his involvement, the public and private expressions of gratitude to Paul by the Clintons and last but not least, Paul's many attempts long before he was indicted to reveal all he knew about the apparently false FEC records filed by the Hillary Clinton campaign.

Ironically for Paul, perhaps, is that his many years of being ignored by most press outlets concerning his "outlandish" claims now appear to be supported - to some extent - by the federal government itself. And now those very same claims are being used against him.

Tom Fitton, president of Judicial Watch, said, "Top officials at the Justice Department have assured us repeatedly -- and recently -- that they remain interested in Peter's evidence concerning the fundraising activities involving the Clintons. And they have repeatedly promised to step in on issues concerning Peter's criminal prosecutions in New York and California.

"Michael Chertoff, the former head of the Criminal Division at the Justice Department, also had promised us that he and his office would make the final decisions related to Peter's prosecution. But now after his departure the Justice Department has permitted local prosecutors to re-indict Paul a few weeks ago.

"Besides opposing Peter's bail the Justice Department also is misstating the allegations related to the Clintons - for example, claiming that Peter Paul tried to bribe Bill Clinton and conceal contributions. It's hogwash and they know it," Fitton said.

Meanwhile, in a California civil case brought by Paul against the Clintons (and others), a judge has dismissed attempts by the Clintons to be excluded from his claims of personal injury and legal efforts to recoup his nearly $2 million of in-kind donations he gave to the senator's campaign.

"Absent extraordinary court intervention, this case will move forward and we'll be deposing both Clintons along with a cast of other characters that includes Tonken."

Tonken on the other hand, has told reporters he's been singing to a variety of federal agencies and that he'll help tie up loose ends that lead to very high level people in Hollywood and Washington, including the Clintons. He also has a book coming out later this year, as well as a sentencing hearing where he's expected to get about 87 months in prison.

Paul M. Rodriguez is the Editor of Insight

To read Insight's previous Investigative stories on the Peter Paul saga click hereFall Guy May Turn The Tables

TOPICS: Crime/Corruption; Extended News; Government; News/Current Events
KEYWORDS: aarontonken; campaignfunding; clintonscandals; conspiringclinton; democratscheat; hillary; judicialwatch; paulrodriguez; peterpaul; saveamerica; scandal; stophillary
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1 posted on 08/13/2004 11:19:50 AM PDT by Thanatos
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To: Thanatos
To read Insight's previous Investigative stories on the Peter Paul saga click hereFall Guy May Turn The Tables
2 posted on 08/13/2004 11:21:34 AM PDT by Thanatos
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To: Thanatos
Nice find Thanatos.


3 posted on 08/13/2004 11:24:34 AM PDT by Lurker ( Rope, tree, liberal. Adult assembly required.)
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To: Thanatos

Bill, Hill, and Janet Waco would look very nice in orange overalls.

4 posted on 08/13/2004 11:27:07 AM PDT by Doomonyou (Molon Labe! FMCDH!)
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To: Thanatos
A beat cop from Boston could have assembled this prosecution in three days and have gotten a guilty conviction on the entire DNC.

This has been going on for years. They had better hurry up because the stauate of limitations is catching up. There is no justice in the justice department, just breast chasers and pond drainers.

5 posted on 08/13/2004 11:29:00 AM PDT by blackdog (Hell is an endless hayfield needing to be raked, baled, and put up.)
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To: Thanatos

Aren't they lovable?

6 posted on 08/13/2004 11:29:08 AM PDT by Cincinatus (Omnia relinquit servare Republicam)
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To: Thanatos

You know this is an old story that is going NOWHERE!

The CLintons are not the McGreeveys of the world where people PAY for their actions.

7 posted on 08/13/2004 11:29:28 AM PDT by funkywbr
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To: Thanatos
It took the DOJ an entire year just to extradite the guy from Brazil. Brazil had not even contested the extradition. All we had to do was send someone to go take custody of Paul. Once he was here, almost one full year has gone by before even interviewing him and seating a grand jury over financial transactions four and five years ago!

Is anyone beginning to get the picture? There won't even be an audit trail for the DNC's electric bills in 2000, let alone what they have been destroying for five years.

For those who have followed this case, the joke is on those who have just discovered it as the holy grail of Clintonista grift.

8 posted on 08/13/2004 11:34:32 AM PDT by blackdog (Hell is an endless hayfield needing to be raked, baled, and put up.)
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To: Thanatos

Another Clinton scandal coming? Could be. Last one was over three weeks ago.

9 posted on 08/13/2004 11:42:11 AM PDT by Graymatter (Countdown---83 more days.)
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To: Graymatter

The biased lamestream media will ensure that not a word of this story will be passed to the unwashed masses. Like the swiftboat story, anything that shows a liberal in an unfavorable light MUST be suppressed!

10 posted on 08/13/2004 11:52:41 AM PDT by Owl558 (Pardon my spelling)
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To: Thanatos


11 posted on 08/13/2004 12:03:32 PM PDT by tang-soo (Prophecy of the Seventy Weeks - Read Daniel Chapter 9)
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To: All

Nothing sticks to the Clintons. So I don't expect anything out of this. I think they go and get a new coating of teflon every two yrs.

12 posted on 08/13/2004 12:07:17 PM PDT by daddyOwe (If God wanted me to be a liberal he would of given me less brains)
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To: funkywbr
The CLintons are not the McGreeveys of the world where people PAY for their actions.

I think Hillary is tied to Kushner who is tied to McGreevey. So is Schumer and Kerry. Federal investigation. There is more to the McGreevey resignation than we have so far been told, I believe.

13 posted on 08/13/2004 12:09:04 PM PDT by bankwalker (We are having a cultural civil war and our side had better win it.)
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To: Thanatos

Another Clinton Scandal Coming?

Click here to check out my web site dedicated to exposing Hillary.

14 posted on 08/13/2004 12:10:15 PM PDT by christie ( -- NOT!)
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To: Thanatos

I don't get my hopes up anymore.

15 posted on 08/13/2004 12:10:51 PM PDT by Tijeras_Slim (Be a Dollar a Day FReeper, and SMILE when you get your Mastercard bill!)
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To: Thanatos

I'm shocked!

16 posted on 08/13/2004 12:13:55 PM PDT by Aetius
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To: Doomonyou
Bill, Hill, and Janet Waco would look very nice in orange overalls.

We got them this time! They are all going to jail this time for sure!

17 posted on 08/13/2004 12:17:37 PM PDT by pete anderson
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To: Thanatos; Alamo-Girl; Mia T
...that bolsters the FBI agent's charges from 2002 but adds a surprising twist involving an alleged bribe to Bill Clinton while he was president that certainly will be unwelcome news among many Democrats who have hoped that scandals involving the Clintons were long ago over.

The clinton scandals will never be over. Even after this scary duo dies.


18 posted on 08/13/2004 12:19:14 PM PDT by M Kehoe
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To: Thanatos
Investigative Report: Another Clinton Scandal Coming?
Yep. Sure looks like it...

See Number Seven, for Hillary Connection info.

Follow the money...

19 posted on 08/13/2004 12:19:37 PM PDT by Wolf_Lochert (He who laughs last thinks slowest.)
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To: Thanatos

Judicial Watch.......aren't they about 0 for 900?

20 posted on 08/13/2004 12:23:44 PM PDT by MamaLucci (Libs, want answers on 911? Ask Clinton why he met with Monica more than with his CIA director.)
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