Former President Bill Clinton approved the sale of sensitive U.S. missile technology to China following donations from a key missile manufacturer to his campaign, in a move prescient of the Clinton Foundation’s “pay-to-play” activities.
Bernard Schwartz donated about $1.5 million to the Democratic Party and Clinton’s 1996 campaign for reelection between 1994 and 1998. Schwartz, who was at the time chairman of Loral Space & Communication Ltd., seems to have used his influence to persuade the Clinton administration to switch the licensing authority for missile exports from the Department of State to the Department of Commerce, as the latter was more vulnerable to political influence.
The Commerce Department subsequently approved Loral’s application for the licenses, prompting the Clinton administration to officially approve the sale of the missile tech to China on May 10, 1999. Clinton pledged in a letter that the export would neither harm national security, nor significantly boost China’s space capabilities.
“Approval was recommended by the Departments of Commerce, State and Defense and is consistent with our policy of supporting the launch of U.S. communications satellites by China subject to strong safeguards being in place,” said National Security Council spokesman David Leavy, according to The New York Times.
When a rocket launch failed in 1996, Loral was there to help China iron out the kinks, for which it was fined $14 million.
Judicial Watch, representing shareholders at Loral, tried to pursue the Clinton administration under federal racketeering laws, alleging that Schwartz’s donations were a clear case of bribery.
The suit did not go through, which may have emboldened the Clintons to continue similar arrangements that look suspiciously like “pay-to-play” deals.
For example, documents recently released by Judicial Watch show that the crown prince of Bahrain managed to obtain an audience with then-Secretary of State Hillary Clinton after giving a generous donation to the Clinton Foundation of $32 million by 2010.
These documents, and others, appear damning enough to warrant an official IRS investigation. The Daily Caller News Foundation reported in late July that IRS Commissioner John Koskinen had referred allegations of “pay-to-play” activities to the tax exemption office, known as the Exempt Organization Program, for further investigation. The Exempt Organization Program, incidentally, is infamous for illegally harassing conservative non-profits under the direction of former IRS official Lois Lerner.
Two examples specifically brought up in the allegations sent over by House Republicans to the IRS include funds given to the Clintons by Laureate Education and Uranium One. Laureate donated $1-5 million to the Clinton Foundation and also paid Bill Clinton in his personal capacity $16.5 million to serve as an “honorary chancellor.”
The International Finance Corporation subsequently invested $150 million into Laureate. IFC takes most of its funds from the U.S. government.
Frank Giustra, an owner in Uranium One and a personal friend of Bill Clinton, donated $100 million for the purpose of creating a “Clinton Giustra Enterprise Partnership” through the Clinton Foundation. That partnership then passed funds over to Pacific Infrastructure. Giustra had significant investments in PI.
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