Peter Paul

AIM Report: The Scandal that Could Sink Hillary - November B
November 22, 2005

Consider the contrasting coverage of DeLay with that of Sen. Hillary Rodham Clinton. Virtually every detail of alleged DeLay transgressions gets reported and in very great detail. But scant coverage has been given to equally serious allegations against the junior senator from New York.

By Paul M. Rodriguez

Recent polls among American readers (and viewers) of the press continue to show a reluctance to trust the once vaunted U.S. mainstream media. And the recent brouhaha at the New York Times over the Judith Miller fiasco only further muddies the public's trust, not only on how reporters and editors report but also on what they choose to publish (or broadcast).

For example, there have been whole forests cut down to provide enough paper for stories about Rep. Tom DeLay, the Texas Republican indicted recently on allegations of money laundering through state political action committees that helped the GOP secure a majority of U.S. congressional seats from the Lone Star state.

DeLay Vs. Hillary

The coverage has been relentless, not only of late but so too going back a number of years as a result of DeLay's hard-charging tactics on Capitol Hill and run-ins with the House ethics committee, formally called the Committee on Standards.

DeLay, much like some predecessors from both political parties, makes for an easy target of erstwhile newsmen in search of good copy. And with so many high-profile lawmakers, even opposition party members don't need to do much to bring about negative coverage.

Media Targets

But a question needs asking: What are the standards used by the press to determine who gets caught in the cross-hairs? And does this standard get applied evenly or does it (like so many in the public believe) vary from target to target?

Consider the contrasting coverage of DeLay with that of Sen. Hillary Rodham Clinton. Virtually every detail of alleged DeLay transgressions gets reported and in very great detail. But scant coverage has been given to equally serious allegations against the junior senator from New York.

There have been no front-page stories in the New York Times, the Washington Post, the Chicago Tribune, the Los Angeles Times, Miami Herald or any other so-called major daily with respect to serious allegations of wrongdoing on the part of Hillary Clinton and her Senate election campaign committee.

While tens of thousands of inches (and scores of hours on broadcast and cable TV) have been used up to discuss allegations that DeLay "laundered" about $190,000 from corporate donors in Texas through the Republican National Committee and then back to GOP candidates in Texas races, there's been virtually nothing mentioned about accusations that Hillary Clinton and senior Democrats "laundered" nearly $2 million of improper or illegal gift-giving during the summer of 2000 when she began her run for the Senate.

Whether one is for or against Hillary or Tom DeLay is irrelevant when it comes to a simple truth that generally is taught in journalism schools, or even at home. Apply a single standard and stick with it. But in the cases of Clinton and DeLay that's far from daily practice.

For example, one would have thought that it'd be big news that the California Supreme Court ruled earlier this year that both Hillary Clinton and her husband could be sued in a civil case filed by Peter Franklin Paul involving serious allegations of wrongdoing. But virtually nothing has been mentioned.

Double-Standard

Then there's the example of press outlets initially hammering some congressional Republicans for not properly filling out their annual disclosure statements both with congressional authorities and the Federal Election Commission, or FEC. Though the press began to expand coverage, e.g., that Democrats also fail to always fill out forms correctly, there's been no mention of Clinton to speak of involving an ethics complaint filed in the Senate and one still pending at the FEC.

There's also been virtually no mention of serious allegations of wrongdoing contained in FBI 302 statements unsealed during a recent trial of David Rosen, Hillary Clinton's former national campaign finance director. Nor of prosecutor memos to a federal judge in a separate case involving Paul in which FBI allegations of improper campaign fundraising schemes were detailed.

As Tim Russert might say, let's go to the tape:

Peter Paul organized, hosted and funded a handful of high-society events during the spring and summer of 2000 for both Hillary and Bill Clinton. In all, he spent about $1.7 million and arranged for hundreds of thousands of dollars of other in-kind contributions for both the Democratic National Committee and Hillary Clinton. Such expenses are supposed to be reported to the FEC in a timely manner. But they were not.

Mystery Money

The funds that Paul tapped into were, according to federal prosecutors, ill-gotten gains from margined accounts of Stan Lee Media stocks that Paul obtained as a founder of the now-defunct Internet media company co-founded with legendary comic book creator Stan Lee.

Paul was indicted as part of an investigation into why the Stan Lee Media company collapsed, allegedly as a direct result of Paul's manipulation of stock shares he and others caused to be inflated. In all, according to prosecutors, Paul et al were responsible for a loss to banks, trading companies and SLM to the tune of $25 million.

The press in early spring and summer of 2001 reported some on the criminal aspects following unsealing of indictments and an attempt by Paul to cast light on his allegations that 1) he was innocent and 2) that the Clintons and DNC were hiding illegally obtained campaign funds, both direct and indirect.

Spotty Coverage

In the intervening four years there has been some news coverage of the continuing saga of Peter Paul's criminal case and civil complaints he's filed in California and at the FEC. For example, the Los Angeles Times and Vanity Fair magazine, along with Insight Magazine and some East Coast papers have given some coverage. And some of it has been quite good if not spotty.

Perhaps one reason is Paul himself, a two-time convicted felon with some outlandish claims and currently a confessed securities violator on one count from the original indictments handed up in New York and California. (Paul is awaiting sentencing while being held on home detention.)

But as outlandish as much of Paul's claims appear to be, there is ample evidence mustered up by federal prosecutors and agents that document the central charges of the former Hollywood mogul.

That is, that he provided tons of money to Hillary Clinton's campaign, that despite a public distancing by Hillary Clinton in late summer 2000 after Paul's criminal background was revealed in a gossip item, she and Bill Clinton continued to privately stay in touch with him and even orchestrated a tour of Air Force One for him and then-California Governor Grey Davis, and that Democrat bigwigs kept in touch for political donations.

Yet for all such documentation of wrongdoing, scant press attention has been paid to the allegations involving Hillary Clinton.

One has to ask why, if only because of the avalanche of coverage of DeLay of late and reports on Senate Majority Leader Bill Frist's alleged ethics and securities violations over insider stock sale deals.

Post Whitewash

Even a recent Washington Post Magazine cover story of roughly 8,000 words sidestepped the hard news at the center of its feature story on Hillary Clinton's former national finance director, a fellow named David Rosen. Rumor of the impending article had both Democrats and Republicans in Washington buzzing whether Hillary Clinton would get slammed or, at least, have her troubles with Peter Paul exposed in depth in a mainstream press outlet.

When it was finally published, however, it hit like a dud among both camps, one relieved that Hillary wasn't pilloried and one throwing up its hands for the same reason.

As Peter Paul himself said in a brief interview, "if this had been an exposé on Tom DeLay you could bet the farm that it would have skewered the guy and thrown up all sorts of mud and exposed allegations of wrongdoing going back years."

Black-Out

Yet none of that was contained in the Washington Post Magazine article despite ample evidence that could have been explored involving the junior senator from New York and, if political bets are accurate, the next presidential contender for the Democratic Party.

There was no mention of serious allegations of wrongdoing by her campaign in 2000 that was detailed in sworn affidavits from FBI agents and statements by prosecutors to federal judges, both in the Paul case and during the recent criminal trial of Rosen, who ultimately was acquitted by a jury that didn't believe the story woven by prosecutors that he violated FEC rules by not reporting the true costs of those Paul-backed fundraisers way back in 2000.

The Hillary Connection

The press covered Rosen's trial in some detail but certainly not with the same gusto as say, the DeLay travails of late. For example, despite the attempt of prosecutors in Rosen's trial to distance Hillary Clinton from the alleged wrongdoing, the press failed to ask some fundamental questions, especially after Rosen's acquittal.

For example: If Hillary Clinton didn't violate any laws and didn't conspire to hide the true costs of her political events then who did besides Rosen? How could it be possible that Hillary Clinton herself didn't know anything was wrong with those fundraising events and FEC forms given the fact that she's been fighting Peter Paul in civil courts for the last couple of years, has been dealing through surrogates with the FEC and, obviously, was aware of charges of campaign violations at the center of Rosen's trial.

But the impression from stories that have run on the Paul and Rosen cases paints a picture of a powerful U.S. senator who had no idea anything was amiss in her campaign or had any responsibility or oversight of finances for her Senate race. Believable?

It's as though a May 30, 2002, affidavit in support of a search warrant of a storage locker once rented by Peter Paul, by FBI special Agent Smith, didn't exist.

The Affidavit

Outlining a then-ongoing secret probe of Clinton's campaign with regard to "allegations of violations of the federal campaign finance statutes, and of false statements to federal government agencies," Agent Smith said this: "In particular, on August 12, 2000, while the Democratic national Convention was underway in Los Angeles, [Peter] Paul was responsible for hosting a fundraising event known as 'THE HOLLYWOOD GALA SALUTE TO PRESIDENT WIL-LIAM 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."

This is one of the central claims Peter Paul has made for years but generally dismissed by the mainstream press even though memorialized in complaints in California courts and at the FEC, and even in a detailed and lengthy memo hand-delivered to Hillary Clinton prior to Paul's own indictments back in 2001.

Despite such direct connections to Clinton involving "documented" allegations of wrongdoing, few press outlets have followed, or followed up, such explosive charges involving a sitting U.S. senator. Or if they have, press reports simply report that Hillary Clinton denies any knowledge or wrongdoing. End of story.

The Media Pack

Yet for Tom DeLay there appears to be no end of those stories, stories that even his own detractors have said appear to be thin stuff based on what's known so far in the state prosecutor's case against the Texas Republican. No doubt DeLay and his supporters feel the press has been unkind to the former House majority leader but, frankly, the role of the press is to investigate allegations of wrongdoing and run to death every hint of evidence.

The result of not applying the same standard to far more serious charges of wrongdoing involving Hillary Clinton and various DNC operatives only makes starkly clear the differing standards at play, differing standards that the public believes the press applies when the mood suits it despite the claims of being fair, balanced and ethical.

If the California civil courts, which have overruled numerous attempts by Hillary Clinton's legal team (including her personal attorney David Kendal), think there's merit to Peter Paul's pursuit of claims that he was hoodwinked into giving nearly $2 million under false premises of future support for his now-failed company, shouldn't the press be digging into the background of the charges?

And where are the stories post David Rosen's acquittal concerning who at Hillary Clinton's campaign broke the law if not the former finance chairman? In reporting on the collapse of Enron, WorldCom and other financial debacles, such was the standard in exploring who, what, when, where and how was involved in each scandal.

Where are the stories about numerous leads contained in the Rosen trial transcripts and at the FEC that, to date has not brought any civil action against Hillary Clinton or her campaign?

Possible Leads

Ample leads to unsavory characters associated with the various Clinton fundraisers are well documented in the handful of stories the L.A. Times, Vanity Fair and Insight Magazine published, including a nifty scheme Rosen authorized on behalf of Hillary Clinton to divert money to a state-controlled political action committee in New York that later supported her Senate run.

Such end arounds in political fundraising have been going on for years but seldom brought to public light despite the good attempts by groups such as Common Cause.

When Tom DeLay does it, however, it's page-one news—but not so when Hillary Clinton does it?

No doubt many skeptics will suggest that allegations against Hillary Clinton are politically driven or that the country is tired of Clinton-related scandals. Maybe so. But it's not the job of the press to pick and choose which stories it pursues once the standard has been established about what types of stories should be reported. And such standards have been set down as recently as the DeLay mess.

Political scandals à la the Tom DeLay, Bill Frist and long ago former House Speaker Jim Wright and Dan Rostenkowski (just to name a few) should be the stuff of good investigative reporting regardless of which party is in power and regardless of who's ox is gored.

Whether Hillary Clinton did anything wrong criminally or civilly has yet to be determined either in courts of law or before regulatory authorities. But as so often is the case, such decisions are not made unless the press is relentless in its job of exploring, exposing and reporting allegations of wrongdoing.

The Jury Is Out

One beneficial unintended consequence of such zeal on the part of the press is that it provides the public with as clear a picture of whether a politician is guilty of wrongdoing, or not. In the case of Hillary Clinton, the junior senator from New York may be riding a wave of popularity and stardom few could muster—but should be tapped or cleared once and for all of any scandal.

The failure by the press to pursue the allegations raised by Peter Paul in his civil suit, for which depositions already are underway, is a crime unto itself.

Media Cover-Ups

Ditto for the failure of the press to link up Paul's allegations with the documentation and testimony presented in the Rosen case, where evidence appears undisputed that Hillary Clinton and her 2000 Senate campaign machine violated the law and perhaps broke some criminal statutes as well.

Sadly, the public may not ever get the chance to find out unless the press does its job and reports with equal treatment the case(s) against Hillary Clinton as fully as it seems determined to report on the case(s) against Tom DeLay. Given that Hillary Clinton appears headed to a presidential run, the public deserves to know before the heat of a White House battle what's been going on.

That's one reason the public so distrusts the press, bias aside. Too much gets dumped on them during political contests that smacks of political manipulations. Maybe if the press were to do its job evenly throughout each year then the public might feel better about an industry now seen as having an agenda. And, it seems, it's not the public's interest.

Paul M. Rodriguez, the former managing editor of Insight Magazine, is a media and public policy consultant in Washington, D.C.