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17Oct16
The Clinton Foundation left a toxic legacy in Colombia
This article is being updated to include comments that Fusion received from the Clinton Foundation after it was first published.
Hillary Clinton has long said she is "very proud" of the Clinton Foundation's work, but many of its beneficiaries in Colombia wonder why.
Since Bill Clinton established the foundation in the late 1990s, with help over the years from Hillary and daughter Chelsea, the nonprofit "global philanthropic empire" has raised roughly $2 billion from foreign governments and various wealthy donors to tackle global development and health problems. While intense media scrutiny has focused on the foundation's donations and its use of that money - partly because of the wealth of available information on its vast financial intake - little sustained attention has been dedicated to its accomplishments on the ground.
Colombia should be the Clinton Foundation's best case study. Ground zero for the drug wars of the 1980s and 90s, racked by uneven development and low-intensity conflict for half a century, Colombia has received more foundation money and attention than any other nation outside the United States. Bill and Hillary Clinton have visited the country often and enjoy close relationships with members of Colombia's ruling party. Colombia has also been home to the vast oil and natural gas holdings of the man who is reportedly the Clinton Foundation's largest individual donor, Canadian financier Frank Giustra. In short, conditions were right for Colombia to be the shining example of what the Clinton Foundation's philanthropy can accomplish in the world, and what makes Hillary so proud of its efforts.
The American Media Institute, a nonprofit news service based in Alexandria, Virginia, partnered with Fusion to send us to Colombia to investigate the Clinton Foundation's impact. We found ground realities that contrast, often starkly, with the nonprofit's platitudes about its good work.
Many of the Colombian "success stories" touted on the foundation's website - the ones specific enough for us to track down - were critical about the foundation's effect on their lives. Labor leaders and progressive activists say foundation programs caused environmental harm, displaced indigenous people, and that it concentrated a larger share of Colombia's oil and natural gas reserves in the hands of Giustra, who was involved in a now bankrupt oil company that worked closely with the Clinton Foundation and which used the Colombian military a 1984-style surveillance program to smash a strike by its workers.
It was a shocking record that belies the progressive principles on which the Clintons have based their political dynasty and philanthropy, embodied in the Clinton Foundation's advertising copy: "Everyone deserves a chance to succeed."
We interviewed young women in the foundation's job-training programs; female business owners who sought help from its programs; workers who toiled for the foundation's biggest individual donor's firms; indigenous fisherman who were promised jobs and aid; and union leaders, social-justice activists, and progressive lawmakers. Some say they lost money. Others said they were used as props. Still others simply thought that the foundation had wasted a lot of their time. "They are doing nothing for workers," one Colombian union official told us, with disgust. "I don't even know what they are doing in this country other than exploiting poverty and extracting money."
The jilted fish-seller
The Clinton Foundation showcases its Colombia initiatives on its web site, boasting a variety of projects designed to promote sustainable development and help the poor. Sandra Valdivieso, a stout, charming Afro-Colombian fishmonger, was hailed in 2013 on the foundation's website and social media as one of its stars. After partnering with Clinton, the website claimed, sales at Valdivieso's fish shop, Pescadería Perlamar del Caribe, were booming, and her future couldn't have been brighter. "I am very happy, indeed," the site quoted her as saying. "Thanks to the Clinton Giustra Sustainable Growth Initiative and their continued support we'll have all the tools and resources we need, such as the refrigerated storage rooms and support staff, to continue growing more and more every day."
In person, Valdivieso told us a disturbingly different story.
In the Cartagena neighborhood of Crespo, off a busy street lined with small shops, Pescadería Perlamar del Caribe's blue-and-white facade and windows displayed three refrigerated cases of shrimp, octopus, and other fresh catches. Valdivieso's brother, Eduardo, in a white baseball cap, greeted customers at the door. The Clinton Foundation star, Sandra, was in the back working, as usual.
With a warm smile, Sandra told us that she was initially enthusiastic about working with the Clinton Foundation. She pulled out a smart phone and showed us pictures of the 2013 launch party for the "Acceso Oferta Local" program, a foundation effort directly supported by Canadian financier Giustra to match poor entrepreneurs — farmers, fishermen, candy-makers, flower vendors and others — with big buyers, like multinational hotels.
She thumbed past a shot of Giustra to show us a photo of herself with Bill Clinton. The former president and the female entrepreneur had megawatt smiles.
"The idea was that they would help small stores and small fisherman," she said. "And that's what it did, but only at the start."
Sandra said she received no money from the Clinton Foundation and, in fact, took out a large bank loan at its urging. Paying this loan proved to be a tremendous burden, she said. Even worse, within months the head of the Acceso project told her that she should no longer deal directly with buyers. Instead, she would sell her fish directly to Acceso — at sharply reduced prices — and Acceso would resell them. In other words, the Clinton Foundation would act as a middleman and profit from margins supplied by the people it was supposed to be helping.
Sandra and eight other Acceso participants immediately dropped out, she said, worried that "if we had stayed with them, we would have gone out of business."
Standing nearby, her brother Eduardo agreed, drawing a finger across his throat for emphasis.
A 'concentration camp for workers'
Formally known as the Bill, Hillary and Chelsea Clinton Foundation, the family's nonprofit was formed in the early days of the Monica Lewinsky scandal. (Initially, it was going to pay for the president's legal defense as well as fund good works in a post-presidency, modelled on Jimmy Carter's sterling efforts.) Its staggering $2 billion haul, according to a Washington Post estimate, has come from American moguls, foreign governments, international capitalists and multinational organizations, including tentacles of the World Bank and United Nations.
So far, criticism of the foundation has focused on its opaque accounting - donations are listed in vague ranges, and the same donors appear under multiple entities - and the possibility it violated federal and state nonprofit laws. Conservatives have questioned the practice of foreign potentates contributing large sums to Hillary Clinton's namesake foundation while she served as secretary of state, but no specific allegations of a quid pro quo have been proven. In recent testimony before Congress, FBI director James Comey declined "to comment on the existence or nonexistence" of a bureau investigation into the Clinton Foundation's activities.
What's missing from the press coverage of the Clinton Foundation is a far more basic question: What do its activities and outcomes reveal about Hillary Clinton's political values?
On the campaign trail, Hillary Clinton trumpets a progressive vision: worker's rights, environmental protections, safeguards for indigenous peoples, support for women's business ownership. Colombian political progressives who have experience with the Clinton Foundation conveyed skepticism to us about the former secretary of state's support for those values. Indeed, the interviewees were hostile to the Clinton Foundation in general - and, in particular, to foundation board member Frank Giustra's sizable Colombian energy corporation, Pacific Rubiales, which benefited richly from Bill Clinton's politicking and the foundation's operations.
Senator Jorge Enrique Robledo, a thin gray-haired three-term senator who once taught architecture at Colombia's National University, is a leading voice of Colombia's Left. He supports gay rights in a traditionalist Catholic country and opposes privatization efforts of his nation's ruling party.
When we met him in his wood-paneled office in Colombia's Capitol building in May, his desk was stacked high with papers related to Pacific Rubiales's labor practices, the result of years of investigative work by his staff. He did not see the Clinton Foundation and its partnership with Giustra's Pacific Rubiales as either progressive or positive. "The territory where Pacific Rubiales operated," he said, thumbing through pages of alleged human-rights violations, "was a type of concentration camp for workers."
Robledo said he had no doubt that Bill Clinton had successfully overcome legal and regulatory obstacles for Giustra's benefit, especially given Clinton's strong relationship with Colombian President Uribe and his stature as a former U.S. President: "Bringing Bill Clinton to Colombia was like bringing God," he said.
Rafael Cabargas, a legendary local oil-worker's union leader who was arrested during a strike at a Pacific Rubiales operation in 2011, was equally dismissive of the Clinton Foundation's and Giustra's activities in Colombia. We interviewed him in a tiny, cluttered union office in one of Cartagena's poor, outlying neighborhoods. "They are doing nothing for workers," he said with disgust. "I don't even know what they are doing in this country other than exploiting poverty and extracting money."
For many on Colombia's Left, Pacific Rubiales is no Ben and Jerry's, and the Clintons are no friends to organized labor. When we looked into their claims, we began to see why.
The Clintons' 'poison dwarf'
The story of the oil and gas exploration company Pacific Rubiales Energy Corp., and its highly profitable Colombian adventure, centers on a graying, five-foot-tall Canadian investor named Frank Giustra. He made his first fortune in Vancouver brokerage circles where Adrian du Plessis, a former stock-fraud investigator, says that Giustra was known as the "Poison Dwarf" - a reference to Giustra's short build and Giustra's reputed penchant deals that were toxic to his buyers but profitable to him. Giustra co-founded Lionsgate Films, wrote the lyrics for a song by Canadian singer/songwriter Sarah McLachlan, and recently signed on as an executive producer of the upcoming "Blade Runner" sequel. His own life could be a movie in the "Citizen Kane" mold.
Giustra's relationship with the Clintons began in January 2005, when Bill Clinton spoke at a Giustra-organized fundraiser for Asian tsunami victims. The pair hit it off; later that year, Giustra's private jet took Clinton to South America to deliver four speeches, where the former president collected some $800,000. Giustra also organized a 60th birthday bash for Bill Clinton, booking Jon Bon Jovi and others for the event, according to the New York Times.
Clinton brought to the friendship three things that Giustra lacked: prestige, charisma and global contacts with heads of state in resource-rich countries. Many of the governments with whom they partnered are not known for the sort of transparency, good governance and democracy that Bill and Hillary Clinton routinely call for when discussing American foreign policy.
In September 2005, Giustra and Clinton flew to Kazakhstan together to meet the Central Asian nation's president. Shortly thereafter, Giustra secured a lucrative concession to mine Kazakh uranium, despite his company's lack of experience with the radioactive ore. As Bill Clinton opened doors for Giustra, the financier gave generously to Clinton's foundation. Within months of securing the Kazakh mining deal, Giustra had donated more than $31 million in all.
In 2007, while Hillary Clinton was the frontrunner for the Democratic nomination for president, Giustra pledged to give a $100 million to the Clinton Foundation in a New York press conference. More Giustra-connected pledges followed, including $4.4 million from Pacific Rubiales (called Petro Rubiales Energy Corp. in foundation filings) and the firm's other financial backers, according to documents surfaced by investigative reporters at the International Business Times. The Clinton Giustra Sustainable Growth Initiative to combat global poverty was born.
"[T]he resource sector is prepared to step up and take the initiative off the drawing board and turn it into a reality for developing countries around the world," Giustra said. He later joined the Clinton Foundation's board of directors. At nearly the same time, Pacific Rubiales won oil and gas exploration rights along Colombia's coast and another large concession to produce oil in the jungle state of Meta.
Why Colombia? The Clintons open doors
Although details on the Clinton-Giustra Sustainable Growth Initiative were sparse, the two men knew exactly where they wanted to start spending. They explained their vision together to a Canadian TV outlet in 2007. Clinton leaned back in his chair, relaxed as usual, reeling off charity buzz words: "broadly-shared prosperity," "sustainable growth," "scalability." Giustra, with his trademark Caesar hairstyle, spoke quietly, rarely changing his facial expression.
"We're going to begin work in Colombia, where the government has already invited us to come," Clinton said.
The interviewer turned to Giustra. Why Colombia?
"We have several interests there in mining and oil and gas," said Giustra in a soft monotone. "I love the people of that country." At least in this case, the foundation's priorities seemed to march in step with the investment interests of its major donors.
Giustra's firm purchased Colombian land from middlemen who had obtained it from poor campesino indigenous farmers, according to government data provided to Sen. Jesus Alberto Castilla Salazar, the first campesino ever elected to the Colombian senate. Some of the land on which Pacific Rubiales is drilling appears to have been received from known drug traffickers, whose names appear on the "Clinton List" — a blacklist of mostly Colombian drug-connected businesses and associates, created under President Clinton in 1995 to bar U.S. entities from doing business with drug traffickers.
One of the individuals Pacific Rubiales bought land from was Peña Torres Miguel de los Santos, whom the U.S. Treasury Department connects to a drug operation headed by two thugs whose evocative nicknames translate as "The Crazy One" and "The Knife." Peña Torres was added to the Clinton List in 2010, while Hillary Clinton was secretary of state—around the time that Giustra was buying land from him.
Castilla, the Colombian senator, told us that Pacific Rubiales used front companies (including something called Major International Oil S.A.) to buy up blocks of land and later lump them together - a conscious effort, he said, to skirt Colombian laws that prohibit single ownership of estates larger than 3,000 acres.
"This has created a grave situation, and they took control of land that was intended for peasants," Castilla said. "Land is at the heart of the conflict in this country and it's very important that small farmers have land. The government has moved in another direction."
Bill Clinton's long history of friendly ties to Colombia's political elite positioned him to open doors for Giustra and Pacific Rubiales. Clinton began promoting a free-trade agreement with Colombia in 2000, his last year in office. He also signed an executive waiver to push through a controversial $1.3-billion military aid package to the country while it was under intense international scrutiny for human-rights violations. After leaving office, Clinton struck up a close relationship with Colombian President Alvaro Uribe, who served from 2002 to 2010.
Bill Clinton's support for the free-trade deal clashed sharply with his wife's platform during her 2008 presidential campaign. Hillary Clinton scornfully denounced the agreement citing labor and human-rights abuses in that country. "I have spoken out against the deal, I will vote against the deal and I will do everything I can to urge the Congress to reject the Colombia Free Trade Agreement," she told a union audience on the campaign trail. "I am very concerned about the history of violence against trade unionists in Colombia," she said in a campaign release.
As President Barack Obama's secretary of state, however, Clinton championed the agreement -as the Clinton Foundation was increasing its activities in Colombia and Giustra's investments there were growing.
Clinton's support appears to have included ignoring corruption in Colombia. Shortly before leaving for a trip to meet Uribe there in June 2010, Clinton received a briefing memo from Cindy Buhl, a congressional staffer for liberal Rep. James McGovern (D-Mass), that urged her to confront the Colombian president publicly about "the recent rise in death threats, attacks and murders of Colombian human rights defenders, religious, community and other NGO leaders."
There is no evidence that Hillary took that advice. She dined with the Colombian president at a Bogotá steakhouse, along with VIP guests that included Bill Clinton and Frank Giustra. (In her memoir "Hard Choices," Hillary described Bill's presence in Bogotá as "a happy coincidence in our hectic schedules.") During an ensuing press conference, Clinton said she wanted to "publicly express our admiration for President Uribe providing a remarkable example of strong democratic leadership."
"Your visit," a happy Uribe responded, "the fact that you spent the night in Bogotá, and President Clinton's frequent visits, are a great manifestation of confidence in Colombia."
That same month, the Uribe regime awarded control of a gold mine to Giustra and his business partners.
This period proved to be a charmed one for Giustra and Pacific Rubiales. Its stock soared to more than $35 a share by November 2010 — which proved to be its all-time high.
Welfare for a donor's businesses
Virtually all of Giustra's Colombian firms operated in remote parts of the country, beyond the eye of public scrutiny, and through a maze of shell companies that make it difficult for Colombia's politicians and press to determine what his actual holdings are.
"With Pacific Rubiales, it's a business with obscure and suspicious transactions in every respect," Mario Valencia, head of an economic research institute called Cedetrabajo, told us. "That's the most important business of Pacific Rubiales. To produce shares. That produced more money than the oil business," he said. "The whole point was to put out information to increase the share price and pump out more shares."
Colombian court and congressional records, corporate documents, stock-market filings, and Giustra's periodic public statements showed that he was linked to numerous of these holding companies. One was set up by Jurgen Mossack of the Panamanian law firm Mossack Fonseca, the law firm made notorious by the "Panama Papers" scandal.
U.S. agencies and international lending institutions approved more than $100 million to support Giustra's Colombian investments, which are intertwined with many Clinton Foundation projects.
One of the most prominent of these investments was Puerto Bahía, a massive port and oil pipeline project in Cartagena, which received about $150 million from the World Bank's International Finance Corporation (IFC) and millions more from the U.S. Agency for International Development. IFC's investment, the organization said in a 2013 press release, was its largest-ever "equity investment in support of a new infrastructure project." Puerto Bahía is being built by Pacific Infrastructure, a firm partly owned by Giustra, and the port was slated to be used by Pacific Rubiales.
The U.S. government is the major shareholder in the International Finance Corporation, and it let the deal go through - even though the IFC conceded that Puerto Bahía could unleash "significant adverse social and/or environmental impacts that are diverse, irreversible or unprecedented" on the local community.
Millions to train housekeepers and baristas
As part of the investment agreement, Giustra's Pacific Infrastructure promised the IFC it would provide job training to Afro-Colombians and indigenous peoples and would support local fishing and farming industries.
To meet these requirements, the Clinton Foundation and Giustra launched a job center (with more funding from USAID). It is said to have trained hundreds of indigenous peoples to work on the port construction.
But visits to each of the Clinton Foundation projects — and interviews with the publicized beneficiaries — reveal a wide gap between the public descriptions and reality.
At the Acceso job-training center, an armed security guard led us to a back room, where employees told us that director Diana Barboza was traveling for several weeks. Another senior employee, Jose Colon, was said to be at lunch.
At the entrance was a poster, featuring two women hugging, advertising the upcoming National Day of Afro-Colombians. Signs on the lobby walls thanked the Clinton Foundation and Giustra for their support. When asked for printed information about the center, the guard provided an enrollment form, saying that was the only information available.
Colon, a muscular twentysomething, returned about 45 minutes later and said Barboza was heading off to Barcelona that very afternoon. He refused to answer a single question about the center. He promised to email a "protocol" to arrange an interview. He never contacted us again.
Despite the center's initial public focus on industrial workers — port workers and other high-paying trades — so far, its alumni have graduated into job roles that appear to require little advanced training: "housekeeping, hotel guest services, and as kitchen aides, baristas, food and beverage servers," according to the Clinton Foundation website.
Karay Baressa graduated from the training program two years ago. Since then, the 22-year-old has been working as a waitress at the luxurious Charleston Hotel in Cartagena's colonial-era walled old city. She earns the minimum salary of some $250 a month.
She said she enjoyed the training, but it has done her little actual good. "I get paid the same as people who didn't do the training," Baressa said, with a wry smile. "There is no difference."
Golfing while workers die
One of Frank Giustra's main ventures in Colombia sits on the island of Baru, in Cartagena Bay: A huge 389-acre port development project called Puerto Bahia.
Outside the project, two uniformed Colombian soldiers and a dog stand guard in oppressive heat under a tent marked with the logo of Puerto Bahía. Almost a mile past the guard tent, the fresh pavement turns to gravel and the port project appears on the left.
The site is cut off from the road by a barbed-wire fence and security guards, and the only visible signs of the project are a few towering white oil storage tanks. Somewhere past the horizon are the terminals and bustling trade waters of Cartagena Bay.
The Clinton Foundation told the Washington Free Beacon last year that its Accesso job training center has "helped hundreds of employees and potential employees" of the port project, many of them Afro-Colombians.
Nearby residents live in sprawling shantytowns of concrete and wood shacks; the promise of port-construction jobs initially gave them hope. But the few who received jobs were shocked by the dangerous working conditions, low pay and callous managers, local union officials told us.
One incident encapsulated their concerns. Shortly before closing time two years ago, two workers were in the bucket of large mechanical arm called a "cherry-picker," painting a massive oil tank. The machine suddenly bucked them off, throwing them into a cement wall. The wall fell on top of them, instantly killing 40-year-old Jose Munoz. The other employee, 28-year-old Sergio Luis Elles, was bleeding and buried, but somehow still alive.
Their fellow workers frantically pulled away the concrete blocks to save the trapped Elles.
Within minutes, an ambulance arrived. But, union officials told us, it didn't take Elles to the hospital. Instead, it took the both workers to the nearby lunch tent. Other workers watched as port officials walled off the tent and paramedics carried the two victims in.
"Pacific did not want the stain on their reputations from worker's accidents," said Julio Carrascal, an official with the Unión Sindical Obrera, the Colombian oil workers' union. "They didn't want the news to get out."
Truck driver Gabriel Martinez saw the men hauled into the tent on what was a very hot day - the recorded temperature in Cartagena that day hit 93 F. "They kept them in the tent for an hour," said Martinez. "Then they left in the same ambulance."
Elles, the injured worker, died shortly after the ambulance departed.
The incident did not lead to safety improvements, Martinez said. About a month later, he saw another worker get his leg ripped open by a pipe. Martinez said he would quit if he could find other work.
Safety training is insignificant, say both workers and union officials. "The accidents continued," said Delmiro Mendez, a former port construction worker. "People don't die (usually), but they are injured."
The safety issues at Puerto Bahía drew the alarm of the oil-workers' union, which insisted that the firm observe established safety standards. But Puerto Bahía management wouldn't budge, union officials told us.
One of the few Colombian lawmakers who took notice was Senator Alexander Lopez, a brash young politician with a reputation for speaking out on workers' rights. In November 2012, Sen. Lopez and his aides made the six-hour trek from Bogota to Campo Rubiales, the oil field operated by Pacific Rubiales, to investigate allegations of labor abuses.
His convoy was stopped at a military roadblock before he could reach the camp's entrance. The soldiers manning the blockade said they were under orders not to let the group pass through. When Lopez asked what authority the military had to prevent Colombian citizens from driving down a public road, one of the soldiers replied: "We don't work for Colombia. We work for Pacific Rubiales."
While union leaders and human-rights campaigners complained, Bill Clinton flew in for a Pacific Rubiales pro-am golf tournament at Bogotá Country Club in February 2012. Colombian President Juan Manuel Santos came to play a few holes with Clinton as a crowd of spectators gathered around the green.
Clinton, clad entirely in white, didn't stop smiling. When Santos moved to leave after the sixth hole, Clinton gripped him in his famous bear hug. "Thank you," said Clinton, giving him a friendly slap on the back. "Thank you for coming."
Key figures from Colombia's political, economic and philanthropic world had turned out at the course to applaud Bill Clinton's work on behalf of the country's most vulnerable communities. Among the dozens of press photos from the golf course on that day, only a few captured Giustra in a white polo shirt, with credentials dangling from his neck.
The exhibition and subsequent PGA tour event, called the Pacific Rubiales Colombia Championship, raised $1 million for the Clinton Foundation.
"Bill Clinton didn't come here to play golf," Robledo, the progressive Colombian senator, said to us about the fundraiser, his lips in a tight smile. "Clinton opened doors for Giustra to do business here."
Picking up the pieces
The good times would not last for Pacific Rubiales. Although the company's stock climbed steadily after the Clinton Foundation announced operations in Colombia, it never poked above that $35-per-share price in November 2010. Its shares have since lost most of their value. Pacific Rubiales changed its name to Pacific Exploration & Production Corporation in 2015. It filed for bankruptcy in May 2016.
Later that same month, Colombian Labor Minister Clara Lopez turned up at an event at a union office in a shantytown on Cartagena's outskirts. There were about a dozen heavily armed Colombian SWAT team members wearing green army fatigues patrolling outside the office. Inside, about 100 people jammed into an oven-hot second-floor room, where photographs hung of Che Guevara, Fidel Castro and several murdered Colombian leftist leaders.
The labor minister told us she had heard that the Clinton Foundation operated in Colombia but had no idea what it did. She expressed concern when told that the foundation's Accesso worker training program pumped out graduates who were employed through subcontractors.
"Subcontracting can be legal in rare situations, but it's probably not," she said. "Wages in this country are very low and workers need to be paid fairly if they have any chance of escaping poverty."
The labor minister was friendly throughout the interview, but grew visibly anxious when asked about Pacific Rubiales. "It's a legitimate company," she said, refusing to add any further comment.
Hillary Clinton has also had little to say about Colombia during her presidential campaign. She was last seen in the country in 2012, dancing and drinking a beer at a Cartagena nightclub called Havana during the Summit of the Americas. The free-trade agreement went into effect a month later.
Hillary Clinton resigned from the Bill, Hillary and Chelsea Clinton Foundation in 2015, citing growing complaints about the apparent conflict of interest with her current campaign. The legal entity continues to bear her name. She recently said the foundation will continue to operate if she is elected, although it will place new restrictions on donations from non-U.S. citizens.
Clinton and her campaign did not respond to requests for comment for this story. In response to questions about ethical concerns, Clinton has promised "complete transparency about donations" to the foundation. She has not detailed any reforms to its operations or regrets about its failures in Colombia.
Sandra Valdivieso still appears on the Clinton Foundation's website, its poster child for the Clinton-Giustra Sustainable Growth Initiative, months after we asked a foundation spokesman to comment on her criticism and experiences. (The foundation declined comment.)
Colombia's progressive community leaders continue to wonder why the foundation came to its country if it was going to side with its multinational donors over its unions and indigenous peoples.
[Source: By Ken Silverstein and The American Media Institute, Doral, Fl, Update 17Oct16]
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