Hillary's Mystery Money Men (Page 4)

EDITOR'S NOTE: Alan G. Quasha responds to this article with thirteen specific objections, and Russ Baker and Adam Federman reply in turn to Quasha, in our web letters section.

But the office seems to have benefited McAuliffe--and Hillary Clinton. When McAuliffe stepped down as DNC chair in February 2005, he said he planned to hit the lecture circuit and spend more time with his family. He may have done both, but he did so as vice chair of Carret from the new company office on the seventh floor of the venerable McPherson Building, once the home of the John Kerry campaign and just off K Street's lobbyist gulch. Simon Rosenberg's New Democrat Network, where Mark Penn, chief pollster and strategist for Hillary's campaign, has served as a fellow, was housed next door to McAuliffe and O'Keefe.

While there, McAuliffe found time to pen his memoir, What a Party!, his paean to the Clintons and his role in raising record amounts of money for them and the party. Yet the memoir itself, for which he earned a seven-figure advance, makes no mention of Carret or his role as its vice chair.

Three people working in nearby suites said they remembered McAuliffe and O'Keefe working out of the office, but none of them remembered the Carret name. Nor did any of them have any idea what McAuliffe was doing as Quasha's vice chair. One person who visited McAuliffe in the suite recalled that he was working on his book but said he was unaware of the official function of the office. "Terry holds his cards pretty close on his business activities," he said.

According to another visitor, McAuliffe was using his time to lay the groundwork for Hillary's long-anticipated presidential bid. With McAuliffe leading Clinton's ravenous fundraising operation, the possibility that Carret's Washington office was opened up, at least in part, to serve just such a function is bolstered by the fact that Carret opened the office only after hiring McAuliffe--and closed it down once he left. During that period, though no Clinton campaign committee yet existed, there were signs that he was already operating on her behalf. In 2005 he appeared on CNN's Crossfire, where the former Democratic chief did not bother to feign neutrality in the primaries: "Personally, I hope she runs," he said. "We would be lucky if she did run, I'll tell you that." In 2006 he kept one foot in Clintondom as a member of the Clinton Global Initiative, an organization whose membership is primarily by invitation to elite business leaders. Wang, whose China International Industry and Commerce partnered with Carret soon after McAuliffe joined the company, was also named to the initiative in 2006.

Meanwhile, during McAuliffe's employment at Carret, Quasha himself donated large sums to the DSCC. He gave $26,700 in June 2006 and $25,000 that October and also personally contributed $4,600, the maximum allowed, to the Hillary Clinton presidential exploratory committee.

Since his start as a young fundraiser on Carter's 1980 re-election campaign, McAuliffe has consistently melded politics, policy and private enterprise. By the time he was 30, he had launched a dozen companies, his own law firm and numerous venture capital companies. Perhaps his most controversial association was with the telecommunications company Global Crossing, where McAuliffe managed to turn a $100,000 personal investment into an $18 million windfall. After McAuliffe sold his shares and got out, the company collapsed; nearly 10,000 employees lost their jobs, and investors lost $54 billion. McAuliffe defended the firm's top executives, who were close with both the Bushes and Clintons, but went on to attack President Bush for similar patterns at Harken.

At a DNC meeting in Las Vegas in 2002, McAuliffe spoke about the recent collapse of Enron and questioned whether Bush could "restore confidence to Wall Street when he has engaged in the same practices he condemns today," a reference to Bush's Harken profiteering. That same year, associates of McAuliffe, fronted by a fake grassroots organization, released an aggressive ad campaign seeking to highlight the Harken-Bush connection.

It is not surprising, then, to learn that neither McAuliffe's connection to Carret nor Quasha's role in the firm have been widely publicized. Carret employees said they were surprised that when Quasha acquired the prestigious firm he did not choose to publicize his coup, instead keeping it quiet. In fact, the company's website does not reveal his role as chair--or much of anything about the firm. The company's chief financial officer, Marco Vega, said he was unable to provide details on Quasha's role in the company, or even to confirm his current title.

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