Saturday, May 23, 2015
Clinton Friend’s Memos on Libya Draw Scrutiny to Politics and Business
When the Clintons last occupied the White House, Sidney Blumenthal cast himself in varied roles: speechwriter, in-house intellectual and press corps whisperer. Republicans added another, accusing Mr. Blumenthal of spreading gossip to discredit Republican investigators, and forced him to testify during President Bill Clinton’s impeachment trial.
Now, as Hillary Rodham Clinton embarks on her second presidential bid, Mr. Blumenthal’s service to the Clintons is again under the spotlight. Representative Trey Gowdy of South Carolina, a Republican who is leading the congressional committee investigating the 2012 attacks in Benghazi, Libya, plans to subpoena Mr. Blumenthal, 66, for a private transcribed interview.
Mr. Gowdy’s chief interest, according to people briefed on the inquiry, is a series of memos that Mr. Blumenthal — who was not an employee of the State Department — wrote to Mrs. Clinton about events unfolding in Libya before and after the death of Col. Muammar el-Qaddafi. According to emails obtained by The New York Times, Mrs. Clinton, who was secretary of state at the time, took Mr. Blumenthal’s advice seriously, forwarding his memos to senior diplomatic officials in Libya and Washington and at times asking them to respond. Mrs. Clinton continued to pass around his memos even after other senior diplomats concluded that Mr. Blumenthal’s assessments were often unreliable.
But an examination by The Times suggests that Mr. Blumenthal’s involvement was more wide-ranging and more complicated than previously known, embodying the blurry lines between business, politics and philanthropy that have enriched and vexed the Clintons and their inner circle for years.
While advising Mrs. Clinton on Libya, Mr. Blumenthal, who had been barred from a State Department job by aides to President Obama, was also employed by her family’s philanthropy, the Clinton Foundation, to help with research, “message guidance” and the planning of commemorative events, according to foundation officials. During the same period, he also worked on and off as a paid consultant to Media Matters and American Bridge, organizations that helped lay the groundwork for Mrs. Clinton’s 2016 campaign.
Much of the Libya intelligence that Mr. Blumenthal passed on to Mrs. Clinton appears to have come from a group of business associates he was advising as they sought to win contracts from the Libyan transitional government. The venture, which was ultimately unsuccessful, involved other Clinton friends, a private military contractor and one former C.I.A. spy seeking to get in on the ground floor of the new Libyan economy.
The projects — creating floating hospitals to treat Libya’s war wounded and temporary housing for displaced people, and building schools — would have required State Department permits, but foundered before the business partners could seek official approval.
It is not clear whether Mrs. Clinton or the State Department knew of Mr. Blumenthal’s interest in pursuing business in Libya; a State Department spokesman declined to say. Many aspects of Mr. Blumenthal’s involvement in the planned Libyan venture remain unclear. He declined repeated requests to discuss it.
But interviews with his associates and a review of previously unreported correspondence suggest that — once again — it may be difficult to determine where one of Mr. Blumenthal’s jobs ended and another began.
Mr. Gowdy’s committee on the attacks in Benghazi hopes to ask Mr. Blumenthal who, if anyone, was paying him to prepare the memos for Mrs. Clinton and whether they were among his responsibilities at the Clinton Foundation. The committee’s investigators are also interested in whether the planned business venture in Libya posed any potential conflicts for Mr. Blumenthal or Mrs. Clinton, whose aides the business partners sought meetings with in early 2012.
The Libya venture came together in 2011 when David L. Grange, a retired Army major general, joined with a newly formed New York firm, Constellations Group, to pursue business leads in Libya. Constellations Group, led by a professional fund-raiser and philanthropist named Bill White, was to provide the leads. Mr. Grange’s company, Osprey Global Solutions, based in North Carolina, would put “boots on the ground to see if there was an opportunity to do business,” Mr. Grange said in an interview.
The men had little experience in Libya. Exactly how Mr. White was to procure leads in Libya is unclear. He spent much of his career as an executive at the Intrepid Sea, Air & Space Museum, and had raised money for politicians, businesses and charities. His biography also describes Mr. White as a consultant for Aquahydrate, a bottled-water company whose backers include Ron Burkle, the billionaire investor who had been a close friend of the Clintons.
“We were thinking, ‘O.K., Qaddafi is dead, or about to be, and there’s opportunities,’ ” Mr. White said in a brief telephone interview. He added, “We thought, ‘Let’s try to see who we know there.’ ”
Mr. White declined to answer follow-up questions about what role Mr. Blumenthal was playing in the business venture. But Mr. Grange described Mr. Blumenthal as an adviser to Mr. White’s company, along with two other associates: Tyler Drumheller, a colorful former Central Intelligence Agency official, and Cody Shearer, a longtime Clinton friend.
“I just know that he was working with the team to work on business development,” Mr. Grange said of Mr. Blumenthal.
In the spring of 2011, Mr. Blumenthal, Mr. Drumheller and Mr. Shearer were helping plan what was to be Mr. Grange’s first trip to Libya, according to emails stolen by a Romanian hacker and published by Gawker and ProPublica in March. Mr. Blumenthal said he had been advised not to comment on the correspondence because the theft remained under investigation by the F.B.I.
In August, Mr. Grange signed a memorandum of understanding with two senior officials in the Libyan transitional government to provide “humanitarian assistance, medical services and disaster mitigation,” along with helping to train a new national police force.
The agreement fell apart, Mr. Grange said, but the partners continued to seek other projects in Libya, including a proposal to create the floating hospitals to treat the country’s war wounded. But doing business there proved difficult: Some Libyan leaders were wary about working with Western companies, while the contractors could not figure out whom to make deals with.
“It was just so factionalized over there,” Mr. Grange said. “You never knew who to believe or trust, or know who was in charge of what.”
Even as their plans sputtered, Mr. Blumenthal continued to draw on the business associates for information about Libya as he shaped his memos to Mrs. Clinton. Sometimes the two realms became blurred.
In January 2012, for example, Mr. Blumenthal sent Mrs. Clinton a memo describing efforts by the new Libyan prime minister to stabilize his fragile government by bringing in advisers with experience dealing with Western companies and governments.
Among “the most influential of this group,” Mr. Blumenthal wrote, was a man named Najib Obeida, who worked at the fledgling Libyan stock exchange. Mrs. Clinton had the memo forwarded to her senior State Department staff.
What Mr. Blumenthal did not mention was that Mr. Obeida was one of the Libyan officials Mr. Grange and his partners hoped would finance the humanitarian projects. The day before Mr. Blumenthal emailed Mrs. Clinton, Mr. Grange wrote to a senior Clinton aide at the State Department to introduce the venture with Mr. Obeida in Libya and seek an audience with the United States ambassador there. Mr. Grange said he had not received a reply.
Mr. Blumenthal sent Mrs. Clinton at least 25 memos about Libya in 2011 and 2012, many describing elaborate intrigues among various foreign governments and rebel factions.
Mrs. Clinton circulated them, frequently forwarding them to Jake Sullivan, her well-regarded deputy chief of staff, and requesting that he distribute them to other State Department officials. Mr. Sullivan often sent the memos to senior officials in Libya, including the ambassador, J. Christopher Stevens, who was killed in the 2012 attacks in Benghazi.
In many cases, Mr. Sullivan would paste the text from the memos into an email and tell the other State Department officials that they had come from an anonymous “contact” of Mrs. Clinton.
Some of Mr. Blumenthal’s memos urged Mrs. Clinton to consider rumors that other American diplomats knew at the time to be false. Not infrequently, Mrs. Clinton’s subordinates replied to the memos with polite skepticism.
In April 2012, Mr. Stevens took issue with a Blumenthal memo raising the prospect that the Libyan branch of the Muslim Brotherhood was poised to make gains in the coming parliamentary elections. The Brotherhood fared poorly in the voting.
Another American diplomat read the memo, noting that Mrs. Clinton’s source appeared to have confused Libyan politicians with the same surname.
Mrs. Clinton herself sometimes seemed skeptical. After reading a March 2012 memo from Mr. Blumenthal, describing a plan by French and British intelligence officials to encourage tribal leaders in eastern Libya to declare a “semiautonomous” zone there, Mrs. Clinton wrote to Mr. Sullivan, “This one strains credulity.”
Mr. Sullivan agreed, telling Mrs. Clinton, “It seems like a thin conspiracy theory.”
But the skepticism did not seem to sour Mrs. Clinton on Mr. Blumenthal. She continued to forward Mr. Blumenthal’s memos, often appending a note: “Useful insight” or “We should get this around asap.”
In an August 2012 memo, Mr. Blumenthal described the new president of Libya, Mohamed Magariaf, as someone who would “seek a discrete relationship with Israel” and had “many common friends and associates with the leaders of Israel.”
“If true, this is encouraging,” Mrs. Clinton wrote to Mr. Sullivan. “Should consider passing to Israelis.”
The emails suggest that Mr. Blumenthal’s direct line to Mrs. Clinton circumvented the elaborate procedures established by the federal government to ensure that high-level officials are provided with vetted assessments of available intelligence.
Former intelligence officials said it was not uncommon for top officials, including secretaries of state, to look outside the intelligence bureaucracy for information and advice. But Paul R. Pillar, a former C.I.A. official who is now a researcher at the Center for Security Studies at Georgetown University, said Mr. Blumenthal’s dispatches went beyond that sort of informal channel, aping the style of official government intelligence reports but without assessments of the motives of sources.
“The sourcing is pretty sloppy,” Mr. Pillar added, “in a way that would never pass muster if it were the work of a reports officer at a U.S. intelligence agency.”