Washington Prowler

Foreign Agent Clinton

But did Bill register as the law requires? How could Hillary not know? Also: Behind those Chertoff resignation rumors. Plus: Frist's quiet run.

By 3.5.06

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CHERTOFF SECURITY
Rumors about Homeland Security Secretary Michael Chertoff's resignation started late Friday after he at the last minute canceled his keynote speech at an American Bar Association conference in San Francisco.

The Internet rumors were prompted by both the cancellation and the leak on Thursday of a videotape that showed Chertoff and other DHS staffs' seeming lack of response to the briefing in preparation for Hurricane Katrina. Democrats on Capitol Hill have been calling for Chertoff's resignation for months.

Chertoff has stood tall against the criticism, knowing perhaps that it would be difficult for President Bush to find another Republican willing to take over what many in Washington consider to be the most institutionally troubled agency in the country. This is not Chertoff's fault. If blame should be placed, say White House and other Administration insiders, it should be laid at the feet of former DHS Secretary Tom Ridge, who at no point in the run-up to the creation of the agency said "No" to the way the department was pulled together from various other Cabinet level departments.

"You're pulling agencies and staff from Justice, Treasury, HHS, Agriculture, and who knows from where else," says one former White House staffer who was involved in the planning. "We were warned that many of these different groups had never played well together when they weren't part of the same agency team. But no one at the top seemed to consider that. Now we see the results."

Chertoff was not the first or even the third choice of President Bush to be head of DHS, and many associates were surprised that he gave up a seat on the federal bench to take up a post that was fraught with infighting.

If Chertoff does decide to leave, it will not be because of Katrina, his associates say -- it will be because of the Dubai Port deal, and the failings of the Treasury Department and the White House to properly vet what should have been a DHS decision, pure and simple.

"Instead, this became a multi-agency scrum and things just fell through the cracks," says a current Administration source. "There is more to come out about this deal, and it may be best for Chertoff to get out while the getting is good."

DUBAI DUETS
Late Friday, Department of Justice lawyers in the Office of Legal Counsel were attempting to determine if former President Bill Clinton had registered as an "Agent of a Foreign Principal."

Federal statute requires that anyone -- even a former President -- doing political or public affairs work on behalf of a foreign country, agency or official must register with the Department, and essentially update his status every six months. It was not clear the Clinton had done so.

If his status is less clear, here is what we do know: If Senator Hillary Rodham Clinton did not know about her husband's standing with the United Arab Emirates and with Dubai World Ports, members of her Senate staff most assuredly did.

"There were enough people in the Clintons' orbit who were potentially going to be part of the deal," says an employee of a firm that does work for both Clintons. "We were pursuing work on the ports deal, and we cleared our participation with Clinton's office. We didn't want there to be a conflict."

In fact, at least two senior outside advisers to Senator Clinton were attempting to get business out of the Port Deal, and President Clinton was the go-between. Associates with the Glover Park Group, which houses just about the entire shadow staff for Hillary's run-up to a Democratic presidential bid, were attempting to get a slice of the DPW deal before the deal was made public about three weeks ago. According to current and former President Clinton staff, Hillary Clinton's Senate office was aware that Glover Park was in the running to do work on the DPW deal.

"She was also very much aware of President Clinton's financial arrangements with the UAE," says a former Bill Clinton staffer. "We're talking about more than a million dollars, some of paid out soon out after they left the White House. That income helped the Clintons buy the properties that allow them to live both in New York and Washington, D.C. This was not an insignificant financial arrangement."

What is not clear is whether or not the junior Senator from New York was aware that Clinton was acting as an agent of a foreign principal, which Clinton clearly was. According to sources with knowledge of the deal, President Clinton was advising members of the DPW buyout team in the UAE, London, and Washington before the deal hit the headlines. He encouraged them to hire a number of people working in consulting firms based in Washington with whom he had both personal and financial ties: The Cohen Group, the Albright Group, and the Glover Park Group. Other sources claim that longtime Clinton confidante and golf partner Vernon Jordan's name was also suggested as potential helpful fixer in the capital.

Much of this activity and consultation took place before the DPW deal hit the front pages of newspapers in mid-February, and about ten days before the DPW deal was to close in Great Britain.

RUNNING QUIETLY
While everything may point to his not running for the Republican nomination, Senate Majority Leader Bill Frist is not out of the running just yet.

Over the weekend, Frist was down in South Carolina, speaking before the South Carolina Republican state executive committee, and attending a couple of fundraisers on Friday and Saturday night for his VolPAC leadership PAC.

Reports out of South Carolina had Frist's speech lacking in political red meat and applause lines, but that appears to be part of the strategy as Frist decides what he will do upon retirement in less than a year.

Frist continues to travel the country, raising money for Republican candidates and his own leadership PAC at a clip that is rivaled only by Sen. John McCain, so his standing has not diminished among the Republican donor base. In fact, the only candidate who could challenge McCain among slightly more moderate Republicans -- on such issues as stem-cell research -- and still have some standing with conservatives is Frist.

There are some murmurs that Frist should take some time off, and perhaps -- if he wants to stay in politics -- look at the Tennessee gubernatorial race in a few years. But 2008 is far enough away, and his retirement will give him enough distance to make a decision outside of the Washington media arena. Which is one reason outside advisers continue to keep an organization in place should he decide to run.

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