Sidney Blumenthal Said He Had No Financial Interest In Libya Projects, But That’s Not Entirely True

(Youtube screen grab)

Chuck Ross Investigative Reporter
Font Size:

Sidney Blumenthal has repeatedly claimed that he had no financial interests in a company seeking contracts in post-Gaddafi Libya that he pitched to Hillary Clinton while she was secretary of state.

But notes from the longtime Clinton adviser’s Jan. 7 FBI interview undercut that claim. They show that Blumenthal did have a financial interest in the company’s project in the form of a finder’s fee, though it never materialized.

It emerged last year that Blumenthal, a former journalist and Bill Clinton White House aide, emailed Clinton touting projects undertaken by a U.S.-based contractor called Osprey Global Solutions. The company sought to work with Libya’s transition government after dictator Moammar Gaddafi’s fall to provide private security services and build floating hospitals in the war-torn country.

Blumenthal’s partners in pushing the project — which would have required State Department approval — were longtime Clinton fixer Cody Shearer and Tyler Drumheller, a retired CIA operative who was the source of many of the intelligence memos that Blumenthal sent to Clinton while she was in office.

FBI notes released on Friday show that Blumenthal discussed with investigators his relationship with Drumheller, who operated his own consulting firm.

“Drumheller stated Blumenthal would receive a finder’s fee if the project materialized, but it did not come to fruition,” read the FBI’s notes, which covered interviews conducted as part of the FBI’s investigation of Clinton’s private email server.

“This potential finder’s fee was the only financial relationship between Drumheller and Blumenthal.”


Notes from Sidney Blumenthal’s FBI interview. (FBI.gov)

That prospect of a finder’s fee contrasts with Blumenthal’s statements in an interview with CNBC in May when he suggested he had no business interests in Libya.

“On the question of so-called ‘clients’ [in Libya], I had no contracts with anybody,” he said. “I didn’t invest in anybody, no one made a nickel. No one spent a penny. I had a real job at the Clinton Foundation working on educational projects, that was a separate matter.”

At the time, Blumenthal was on the payroll at the Clinton Foundation, earning a $10,000 monthly salary to work on policy and communications issues for the Clinton family non-profit.

Blumenthal’s attorney, former Justice Department deputy Attorney General James Cole told Politico last May that Blumenthal did not profit from his work for Osprey.

“He never got any money from — and has no continuing relationship with — Osprey or Constellations,” said Cole.

Blumenthal’s failure to earn a finder’s fee was not for his own lack of trying. He directly pitched Clinton about Osprey’s projects, emails released last year show.

In a July 14, 2011 memo, Blumenthal informed Clinton, who was set to travel to Turkey, that she would likely meet a Dr. Neydah, the Libyan transitional government’s ambassador to the United Arab Emirates.

“Dr. Neydah, may tell you the [Transition National Council] has reached an agreement with a US company,” Blumenthal wrote.

“The company is a new one, Osprey, headed by former General David Grange, former head of Delta Force. Osprey will provide field medical help, military training, organize supplies, and logistics to the TNC. They are trainers and organizers, not fighters.”

“This is a private contract,” he continued, adding that the project “puts Americans in a central role without being direct battle combatants.”

He did not inform Clinton that he stood to earn a finder’s fee for his work.

“Tyler, Cody and I acted as honest brokers, putting this arrangement together through a series of connections, linking the Libyans to Osprey and keeping it moving.”

Clinton appeared amenable to Blumenthal’s request.

“Will followup tomorrow. Anything else to convey?” she wrote several days later. Clinton’s support would have been crucial since any work with the transition government would have received State Department approval.

But the projects never made it that far in the procurement process. Chaos in Libya and lack of funding there meant that the endeavors never got off the ground.

In August 2011, Osprey signed a memorandum of understanding with two officials with Libya’s transitional government to provide “humanitarian assistance, medical services and disaster mitigation,” as well as training for a new national police force.

As The New York Times reported last year, Blumenthal approached Clinton again regarding Osprey’s financial interests in 2012.

In a Jan. 5, 2012 memo, Blumenthal touted a man named Najb Obeda, who then worked as the head of the Libyan stock exchange.

According to The Times, Blumenthal did not mention to Clinton that Obeda was partnered with Osprey’s David Grange on the humanitarian projects. The day before Blumenthal sent his memo, Grange contacted Andrew Shapiro, a senior Clinton State Department aide, hoping to put Obeida in touch with Gene Cretz, the U.S. ambassador to Libya at the time.

James Cole, Blumenthal’s attorney, did not respond to a request for comment.

Follow Chuck on Twitter