Clintons' InfoUSA Ties Scrutinized

Clintons' InfoUSA Ties Scrutinized

by Peter Overby

All Things Considered, February 13, 2008 · Political campaigns spend thousands, even millions of dollars to acquire good mailing lists.

Last year, New York Sen. Hillary Clinton took the unusual step of renting out some of her lists. The transaction once again highlights the Clintons' connections to a businessman who now faces questions from the Securities and Exchange Commission.

Reports from Clinton's campaign show that on Dec. 3, it collected payment for renting out three mailing lists, the sale of which netted them $8,225.

It was an unusual transaction, according to Roger Craver, a liberal guru of the political direct-mail industry.

"As a general rule, a campaign will not let its donor list out into the markets until the campaign is over," he said. "This is the mother's milk of small-gift fundraising, and they use these lists frequently."

There are no records that any other presidential candidates rented out mailing lists last year.

Several sources who work in political consulting and in direct mail, who would not speak for attribution, said they were surprised by the deal, as well as its low price.

According to one direct-mail professional, $800,000 would have seemed like a more plausible price for a quality list. A political consultant suggested that the list broker's unidentified client could have rented the list as a sample one — to do a test-run mailing.

But most intriguing of all was the renter of the Clinton list: a list brokerage company that is a subsidiary of one of the data-collection industry titans, Info U.S.A.

Info U.S.A.'s CEO is Vinod Gupta, a close ally of both Clintons. Gupta's empire also includes the Opinion Research Corporation, which conducts the political polling for the television network CNN.

Vin Gupta has a long history of giving and raising campaign money for the Clintons, and gave $1 million for the 2000 Millennium Celebration, a New Year's Party thrown by the Clintons.

When he was president, Bill Clinton named Gupta to the Kennedy Center board of directors. Gupta also got to sleep in the Lincoln bedroom. He gave another million to the Clinton Presidential Library.

The library is run by the National Archives, but Bill Clinton raised the money for its construction and always refused to identify his major donors.

Last fall, ABC News reported that the library rented out a portion of its donor list to a list broker — the same one that rented Hillary Clinton's campaign lists.

Gupta spent $900,000 of corporate money flying the Clintons to various destinations. The Clinton campaign said in May that Info U.S.A. had been reimbursed to comply with federal campaigning and ethics rules.

After the Clintons left the White House, Gupta hired Bill Clinton as a consultant. It's one of two continuing business relationships he has had since leaving office, and it has been worth $3.3 million, in addition to the options on 100,000 shares of stock.

When challenged about that outlay of cash to the former president, Gupta has said Clinton is worth $40 million to the company.

Kevin Starke is a stock analyst in Connecticut who follows Gupta's company.

"If it were me, and I had hired Bill Clinton to the tune of $3 million, I think I would try to make a fairly distinct case for why that was money well spent, and I'm not entirely clear on why he hasn't done so," Starke said.

The corporate spending on behalf of the Clintons helped fuel a shareholder lawsuit against Gupta and 10 corporate directors.

There are plenty of other allegations in the suit about homes, cars, and a yacht for Gupta. A Delaware chancery court judge dismissed some of the allegations involving the Clintons. But the case is still proceeding. It has led to an informal inquiry by the Securities and Exchange Commission, which is also asking if Gupta misspent corporate funds.

"It's not a company that's threatened with bankruptcy or anything like that. It needs probably to be run with more of a view toward generating value for all shareholders, and not just the main shareholder," Starke said.

Info U.S.A. did not respond to interview requests this week.

The Clinton campaign said Wednesday that the lists were rented out by her 2006 Senate campaign committee — and that the rentals took place before she began her formal campaign for president last January.

That would mean the rental fees went unpaid for at least 11 months. Starke, the analyst, cites Info U.S.A. data showing that on average, it settles accounts within 64 days.
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