Protecting Hillary: Bill Clinton Severs Business Ties With Billionaire Buddy Burkle

Protecting Hillary: Bill Clinton Severs Business Ties With Billionaire Buddy Burkle

December 12, 2007 04:06 PM

Bill Clinton has severed business ties with Los Angeles billionaire Ron Burkle, fearful that their deals could erupt into bad publicity damaging his wife's presidential bid, according to sources who know both men.

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The crucial development, sources said, was the September 26 publication of a front page Wall Street Journal article detailing some of Yucaipa's questionable dealings. The story, which broke on the same day that heads of state and business leaders convened to discuss the Clinton Global Initiative, detailed how a young Italian businessman had convinced Burkle and a Clinton aide to invest millions of dollars in a poorly run church-property buying venture.

Clinton, according to sources, considered the piece a major embarrassment and decided to withdraw from Yucaipa.

Clinton was furious with Burkle after the WSJ story appeared, according to a source close to the former president. Burkle and Clinton exchanged heated words, the source said, adding, "their friendship will never be the same. There is now a real distance between Burkle and the Clintons."

According to the WSJ story, in May 2007, Burkle and Yucaipa filed a lawsuit accusing the Italian businessman, Raffaello Follieri, of "systematically misappropriating" at least $1.3 million to fund personal expenses and activities.

Follieri responded by accusing Burkle of blocking efforts to develop the purchased properties. Adding to the embarrassment was Follieri's reported promise to help deliver Catholic voters to Hillary Clinton, according to the Journal.

The lawsuit was settled in late November, according to court documents signed by a Delaware Chancery Court judge.

Prior to the failed church-property buying scheme, Yucapia found itself on the receiving end of a lawsuit. In April 2007, investors of Hawk Opportunity Fund sued Burkle over charges that Yucaipa's acquisition of Allied Holdings, Inc., North America's largest car-hauling company, gave it an unfair share of the market. The suit was dismissed.

But the transaction, not the lawsuit, forced Clinton to get involved. According to reports, the former president was brought on board to help persuade the International Brotherhood of Teamsters to take a 15 percent wage cut at Allied in exchange for bringing the company out of bankruptcy. The Teamsters agreed to accept the reduction.

Finally, according to USA Today, former Clinton aides helped secure a multi-million dollar federal contract for a Georgia-based company in which Yucaipa had 20% ownership. AmeriCold, one of the nation's largest cold-storage companies, was paid up to $85 million, to help with Katrina recovery efforts after James Lee Witt, who headed Federal Emergency Management Agency in the Clinton administration, lobbied on the company's behalf.

AmeriCold's job performance became the subject of controversy and bad publicity. As USA Today wrote: "truckers who were paid $800 a day (to help Katrina victims) hauled ice from state to state without unloading, then delivered their cargoes to AmeriCold and other storage facilities as far away from the Gulf Coast as Maine."

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Follieri responded by accusing Burkle of blocking efforts to develop the purchased properties. Adding to the embarrassment was Follieri's reported promise to help deliver Catholic voters to Hillary Clinton, according to the Journal.