How Hillary Played Politics With 9/11

HUMAN EVENTS Assistant Editor Amanda Carpenter’s new book, The Vast Right-Wing Conspiracy’s Dossier on Hillary Clinton (Regnery — a HUMAN EVENTS sister company), hit shelves this week. Below is Chapter 9 of the Dossier.

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After the terrorist attacks of September 11, Washington politics changed dramatically. Senator Clinton did not.

September 11 spurred her to win pork — large federal grants for her well-heeled corporate campaign donors and pipelines of money for boondoggles in New York — and dodge the tough issues in order to maintain her political viability.

The $20 Billion ‘First Installment’

Two days after the attacks, as Ground Zero was still smoking, Senator Clinton and Senator Chuck Schumer marched into the Oval Office and demanded President Bush give New York $20 billion—the largest federal aid package in history. President Bush quickly approved. What the Vast Right-Wing Conspiracy suspected, America learned months later: millions of these dollars were routed to big business and pet political projects.

The $20 billion was not designated for actual damage estimates. It was a near-arbitrary figure invented by New York’s senators and governor, along with the city’s mayor.

Clinton justified the expense in a biographical video for her 2006 Senate re-election campaign. “We need at least as much as is being asked for everything else. We need $20 billion,” she said.

Schumer concurred: “To ask for more than $20 billion—more for New York for all the military, and the rest of the country—would seem excessive,” he explained to the Daily News. “But to ask for less than $20 billion would be derelict in my duties as a New York senator. So I figured, ‘Let’s match it, $20 billion for the rest and $20 billion for New York.’”

And so it was matched.

That week on Face the Nation, Senator Clinton praised the president for quickly approving the aid, but indicated she considered it only a “first installment.” Still, she told Today Show host Katie Couric she was “absolutely delighted” about the cash. Some corporations close Senator Clinton were likely “delighted” as well.

The Goldman Sachs Connection—Hillary Helps the Rich Get Richer

The Daily News published a scathing seven-part investigative series near the end of 2005 exposing the gross misuse of 9/11 funds and documenting how huge corporations and wealthy real estate moguls got the lion’s share of recovery allocations.

The Daily News had long been on the case. The tabloid began sounding the alarm in 2002, reporting that “about $500 million is being funneled in grants to 145 big corporations that promise not to quit downtown. By comparison, thousands of families struggling to pay their rent and mortgage have received less than $75 million from the Federal Emergency Management Agency.”

One beneficiary of this federal largess was Goldman Sachs, a global investment banking and securities firm. Ranking forty-first on the Fortune 500 in 2006, Goldman Sachs is worth $43.3 billion and turned a $5.6 billion profit in 2005.

Goldman Sachs received a $25 million grant in 2005 from the Job Creation and Retention program. According to the Daily News, Goldman Sachs “agreed to stay downtown only after forcing Governor Pataki to abandon a West St. tunnel near the entrance to Goldman’s planned $2.4 billion headquarters across from Ground Zero.”

The jobs program, funded by the Department of Housing and Urban Development and administered by the Empire State Development Corporation (ESDC), dispensed $320 million to seventy-five recipients that “employed 200 or more people that were displaced from their workplace and are committed to keeping jobs in New York City for seven years.” An ESDC spokeswoman admitted to the Daily News that grants were “awarded to firms to stay downtown even when they were not at risk” of leaving. And Goldman Sachs, to be sure, was highly unlikely to leave its prestigious Manhattan address.

On November 29, 2005, Clinton spoke at the groundbreaking ceremony in Lower Manhattan of Goldman Sachs’s new forty-three story corporate headquarters, a resplendent building partially financed with government recovery grants.

According to a Goldman Sachs press release, Clinton declared, “Following the tragic events of September 11, I was proud to have worked with my colleagues in Congress to secure $20 billion in federal aid for New York. Major employers like Goldman Sachs needed to know they had a partner in government to ensure that Lower Manhattan could sustain their business in the area.”

And this was not the end of the government’s benevolence toward Goldman Sachs. According to New York City’s Independent Budget Office, the company also saved a whopping $9 million in interest payments when it received a $1.65 billion “Liberty Bond,” a federally funded, tax-exempt, private activity bond program made available to New York after September 11.2

Capitol Corruption

In 2001, Congress authorized the Small Business Administration (SBA) to dispense up to $4.5 billion in Supplemental Terrorist Activity Relief (STAR) loans to small businesses that were “adversely affected” by the September 11 attacks. Senator Clinton, who helped create the program, expressed shock when news broke that the SBA was being abused by out-of-state businesses. But Senator Clinton, in fact, was intimately familiar with SBA abuse.

In December 2005, the Office of Inspector General (OIG) produced a report revealing the program’s enormous waste. The investigation found that only 15 percent of STAR loan recipients had been qualified to receive their loans.

To qualify for a loan, an applicant had to provide documentation proving to the SBA that his business was “adversely affected” by September 11. But, according to the Inspector General report, “Lenders were actually advised they would not be required to provide their justification for prior SBA approval.”

This allowed many out-of-state businesses to get cheap federal loans on the flimsiest of pretexts.

New York Post correspondent Geoff Earle reported that a semiprivate golf course in Texas received a $640,000 loan by claiming that his business was harmed by the 9/11 terrorist attacks because, “People were more interested in staying home and watching coverage of the attack on television than playing golf.”

Earle also described how a Las Vegas tanning salon earned a $584,000 loan with its sob story of losses stemming from local showgirls who, having been laid off after September 11, were no longer tanning themselves.

Abuses of the STAR program abounded. A single liquor store in Georgia received over $1 million, while two California gas stations procured $732,000 and $1,460,000 respectively. A Florida dry cleaner pocketed a hefty $450,000.

Following these revelations, Clinton claimed she was infuriated that federal funds she had helped allocate were so grossly misspent.

She fired off a letter to the president in December 2005, declaring, “I am particularly incensed by the finding included in the SBA’s Inspector General’s report that despite the fact that in the months following September 11th, while many New York businesses struggled to just to stay afloat, SBA undertook efforts to promote the program by advising lenders that virtually any small business qualified and assuring them that SBA would not second guess their justifications.”

But Clinton had not always been so skeptical toward the organization. In fact, she had reacted to previous Republican attempts to reign in the SBA by extolling it as a noble, innocent victim of Republican greed and cruelty.

At a September 2004 speech to the National Press Club, Senator Clinton urged the president to keep SBA programs fully funded, since reducing the organization would allegedly favor wealthy CEOs. Hillary took a shot at the president. “The president has cut funding for the Small Business Administration by 25 percent, the largest percentage cut of any federal agency,” she said, defending the wasteful spending she would later deplore.

The Paths of Waste Lead to Hillary

Another boondoggle was the September 11 clean air program. This scheme apparently made every last New Yorker eligible to receive up to $1,750 in federal funds to purchase air conditioners, purifiers, and vacuum cleaners. Hillary, from her seat on the senate Committee on Environment and Public Works, supported the program.

The program, originally estimated at $15 million, ended up costing at least $129.7 million. Only 5,000 New Yorkers were expected to participate, but 118,591 ultimately won approval for free appliances, including 5,211 applicants in Flushing, Elmhust, Hillcrest, and Rego Park in Central Queens—areas that the plume of noxious air from the blasts did not reach—were approved to get $6.3 million in appliances. Eight miles from Ground Zero in Starrett City, where residents were likewise unaffected by soot, one in every ten households applied for clean-air freebies. In that city, a total of residents hauled in $633,495 from federal taxpayers.

The situation brought to mind the famous image of the “magic bullet” theory of President Kennedy’s assassination. “New Yorkers by tens of thousands received free air conditioners, air purifiers, and other clean-air devices in such an illogical pattern that the toxic plume from the smoldering World Trade Center would have had to travel like a wild tornado, arbitrarily touching down here and there throughout the city,” reported the Daily News. “The size and scope of abuse in the FEMA-funded program dwarfs any fraud and misuse allegations that have surfaced in disaster aid programs for hurricanes in Florida, wildfires in California, and floods in Detroit.”

The Daily News found a staggering total sum was spent on clean air equipment:

Air conditioners 83,656 $37.7 million
Air purifiers 119,872 $43.0 million
Air filters 96,609 $18.3 million

Vacuums 164,794 $30.7 million

Total: $129.7 million*

*This total differed from FEMA’s estimate of $131 million.

Hillary’s Pizzas for Arabs

One of Senator Clinton’s favorite mental health programs was used to buy pizzas for Arab immigrants and assist them with their immigration applications in the aftermath of September 11.

The $154.9 million Project Liberty grief counseling program was created to help New Yorkers cope emotionally with the terrorist attacks. Clinton had worked hard to fund the program since its inception. In an October 2004 press release Clinton declared, “Project Liberty has provided crucial mental health services to so many people who might not have asked for it.” The statement emphasized that “Clinton has been working to secure continued funding for mental health counseling since the attacks of September 11, 2001.”

The program ended up funding Brooklyn’s Arab-American Family Support Center, an organization dedicated to helping “Arab-speaking immigrants in New York adapt to life in the United States and its culture.” Emira Habiby-Brown, former head of the Brooklyn Center, told the Daily News she used her organization’s $75,000 Liberty mental health grant to help “hundreds of our men” waiting outside a nearby immigration office by assisting them in filling out forms, interpreting for them, and even buying them pizza. Habiby-Browne commented that the Liberty funds—designed strictly for mental health assistance—were “used it in a way that was helpful to our community at the time.”

Ben Hindell also got cash. Hindell is an artist, but he landed a job as a school counselor thanks to a $740,000 federal grant to a nonprofit called Leap. The money was supposed to help children cope with the terrorist attacks. By 2003 and 2004, Hindell admitted, “a lot of people who counseled lost track that it was about 9/11 and it just kinda became helping kids with whatever they were struggling with.”

Hindell’s boss, Ila Gross, indicated that Leap was encouraged to spend money regardless of the level of need. “A lot of people were seduced that there was suddenly an enormous amount of funding available. Everyone was pushing us to get out there, get out there.”

Senator Clinton is still pushing this grief cash today. When President Bush’s 2006 fiscal year budget proposed eliminating these funds, Clinton fought to include $75 million in similar programs for ostensibly disconsolate New Yorkers in the Hurricane Katrina emergency spending bill.

Hillary’s Federal Aid for Robert DeNiro

Large sums of recovery money helped finance pet projects that included street beautification, an “I Love NY” tourism campaign and Robert DeNiro’s Tribeca Film Festival in Manhattan.

The Alliance for Downtown New York may be the champion at plundering recovery funds. The Alliance convinced the Lower Manhattan Development Corporation (LMDC), which controlled $2.7 billion in recovery money, to grant it $5.4 million. Nearly all of this money was used to pay for projects that, before September 11, were privately financed by a group of downtown property owners.

Bill Bernstein, vice president of the Alliance, said his group approached the LMDC for money to complete its $20 million “streetscape program.” The project began in 1998 to “reconstruct sidewalks, install benches and trash cans, improve lighting and signs along Broadway from City Hall to the Battery, and install metal inserts commemorating parades along the Canyon of Heroes.” After September 11 the government started picking up this tab, apparently viewing events like ticker-tape parades for the Yankees as a vital government interest.

Bernstein recalled to the Daily News that securing funding for DeNiro’s film festival was initially difficult. The Department of Housing and Urban Development (HUD) “had a lot of bizarre requirements,” he said.

But HUD does not appear to be strict about handing out money. The following is a partial list of projects that did receive monies after meeting HUD’s “bizarre requirements”:

  • $90 million to buy the Deutsche Bank building at Ground Zero$45 million to decontaminate and demolish that very building
  • $30 million to enhance sixteen city parks
  • $19 million for an “I Love NY” tourism campaign
  • $4 million for the beautification of four blocks on Broadway’s Canyon of Heroes
  • $3 million to promote fifteen museums
  • $3 million for actor Robert De Niro’s Tribeca Film Festival
  • $220,000 to cover Zagat’s downtown guide booklets that were distributed for free to workers below Houston Street
  • $250,000 toward a three-day film festival for Italian artisans
  • $100,000 to Pace University to design the largest roof in the northeast to be made out of live plants
  • $328,000 for consultations on exhibits for the World Trade Center memorial competition

The ‘Bush Knew’ Claim

On September 12, 2001, Senator Clinton joined President Bush in his condemnation of the terrorist attacks, warning the killers they would soon feel the fury of the United States.

She declared, “We will also stand united behind our president as he and his advisers plan the necessary actions to demonstrate America’s resolve and commitment. Not only to seek out and exact punishment on the perpetrators, but to make very clear that not only those who harbor terrorists, but those who in any way aid or comfort them whatsoever will face the wrath of our country.”

Within a few months, however, her tune had changed. Senator Clinton turned against the president, even accusing him of having prior knowledge of the attacks.

On May 16, 2002, the cover of the New York Post blared: “Bush Knew.” According to the Post, the Bush administration “believed bin Laden was merely plotting a ‘traditional’ hijacking,” but “evidence has surfaced in recent weeks that intelligence and law-enforcement officials had evidence something bigger might have been in the works.”

Senator Clinton scrambled to be the first to react publicly. On the floor of the Senate, she exclaimed, “We have learned that President Bush had been informed last year, before September 11, of a possible plot by those associated with Osama bin Laden to hijack a U.S. airliner.”

White House spokesman Ari Fleischer told the press corps that Senator Clinton “did not call the White House, did not ask if [the Post headline] was accurate or not. Instead, she immediately went to the floor of the Senate, and I’m sorry to say that she followed that headline and divided.”

On the Senate floor, Clinton demanded that classified intelligence discussed in the story be made public. She added, “I also support the call by the distinguished majority leader, Mr. Daschle, for the release of the Phoenix FBI memorandum and the August intelligence briefing to congressional investigators.”

This referred to a memo written before September 11 by FBI Special Agent Kenneth Williams that had raised suspicions about foreign flight students in the U.S., including Hani Hanjour, who would later pilot Flight 77 into the Pentagon. A December 2002 report by a joint congressional intelligence committee concluded that Williams’s memo had been ignored by his superiors in the intelligence community—not by the president. The director of Central Intelligence at the time of the Phoenix memo was George Tenet, appointed by Senator Clinton’s husband.

The Wiretapping Dodge

During the debate about reauthorizing the Patriot Act, the New York Times printed a story on December 16, 2005, claiming that “President Bush secretly authorized the National Security Agency to eavesdrop on the communications of Americans and others inside the United States to search for evidence of terrorist activity without courtapproved warrants ordinarily required for domestic spying.” Liberals on Capitol Hill were outraged, but Senator Clinton said nary a word.

Three days later, Attorney General Alberto Gonzales and General Michael Hayden, the principal deputy director of national intelligence, held a press briefing to explain the terrorist surveillance program. They said a communication monitored through the program had to meet three standards: there had to be “a reasonable basis” to conclude that one party to the communication was affiliated with al Qaeda, one of the communicating parties had to be located outside the U.S., and the communication had to be otherwise unavailable to the government. The Left howled that the program violated civil liberties. Democratic senator Russ Feingold of Wisconsin, a potential 2008 presidential candidate, introduced a resolution to censure the president. Senator Clinton was silent, neither supporting nor condemning Feingold’s resolution.

In support of censure, Senator Feingold declared, “This president exploited the climate of anxiety after September 11, 2001, both to push for overly intrusive powers in the Patriot Act, and to take us into a war in Iraq that has been a tragic diversion from the critical fight against al Qaeda and its affiliates. In both of those instances, however, Congress gave its approval to the president’s actions, however mistaken that approval may have been. That was not the case with the illegal domestic wiretapping program authorized by the president shortly after September 11. The president violated the law, ignored the Constitution and the other two branches of government, and disregarded the rights and freedoms upon which our country was founded.”

Senator Feingold had thrown down the gauntlet. President Bush was a duplicitous scoundrel, and his tactics in the war on terror were un-American. Where would Senator Clinton come down?

As it turned out—nowhere.

The Capitol Hill press gaggle clamored to get Senator Clinton’s reaction to Feingold’s statement, but she and her colleagues conspicuously fled from reporters waiting outside of their weekly policy luncheon.

In an interview with National Public Radio, Washington Post national political reporter Dana Milbank described how Clinton even tried to use the four-foot, eleven-inch Senator Barbara Mikulski as a shield to keep reporters at bay. Why does Hillary not join her party in demagoguing against these intelligence programs? However much it annoys her liberal base, Hillary needs to pose as a candidate who believes in strong national security. (The VRWC should exploit this tension.)

The Homeland Security Gambit

In a January 2003 speech at the John Jay College of Criminal Justice in New York, Senator Clinton ridiculed the Department of Homeland Security and criticized President Bush for his alleged weakness on defense. “We have relied on the myth of homeland security— a myth written in rhetoric, inadequate resources, and is a new bureaucracy, instead of relying on good old fashioned American ingenuity, might, and muscle,” she claimed. “Homeland Security is not simply about reorganizing existing bureaucracies,” she explained, but rather “about having the right attitude, focus, policy and resources.”

Hillary’s “right attitude,” included repealing tax cuts (that is, raising taxes) to give more federal money to New York, and increasing the bureaucracy. She introduced the Provide for the Common Defense Act that would increase spending and the size of government as well as help pay for state-run programs that New York was not funding. The bill called for two additional security coordinators inside the Department of Homeland Security dedicated to New York, a $3 billion “counter-technology fund” to pay for city-based security measures, more security regulations for certain industries, and money to track medical records of first responders.

The ‘Federal Interoperable Communications Act’

In March 2006, the Democrats with great fanfare unveiled their new “National Security Strategy,” proposing, among other ideas, to catch Osama bin Laden. Nearly all the prominent party members attended the ceremony—except Senator Clinton.

The event, held at Union Station, featured a bevy of law enforcement officials stationed for prime photo opportunities with Senate and House minority leaders Harry Reid and Nancy Pelosi, senators John Kerry, Dick Durbin, Barak Obama, Debbie Stabenow, House member Steny Hoyer, and even retired general Wesley Clark and former secretary of state Madeleine Albright, among others. Participants crowded onto an elevated platform in front of slickly produced signs that read “Real Security.”

It was unlike Clinton to miss such an opportunity for publicity, but the reason soon became clear. Two months later, through the Democrats’ “Steering and Outreach” committee (which she chairs), Clinton scheduled a day-long security summit to unveil her own plans. The conference was ostensibly organized to help the party refine its agenda and rhetoric on national security, but Clinton used the occasion to promote a new piece of legislation she had crafted, lining up several supporters to advocate her plan.

She proposed the Federal Interoperable Communications and Safety Act (FICS). She would create a new undersecretary for emergency communications and an “interoperability czar” to lead an Office of Emergency Communications. Her bill would also require all state and local governments to implement statewide communications programs in order to be eligible for some Department of Homeland Security grants.

Technology Daily, one of the few publications to cover the conference—because it was closed to the press—reported that most speakers supported Clinton’s ideas. Robert Atkinson, president of the Information Technology and Innovation Foundation, Michael O’Hanlon of the Brookings Institution, Delaware governor Ruth Ann Minner, 9/11 Commissioner Jamie Gorelick, and other panelists discussed the need for a federally funded interoperable communications program.

Former Democratic senator Bob Kerrey, another member of the 9/11 Commission and president of the New School, who had previously told New York Magazine that Clinton was a “rock star,” delivered the keynote address. Harold Schaitberger of the International Association of Fire Fighters, who regularly endorses Democrats, was also a featured speaker.

This was another example of Hillary ditching her party in order to better position herself for a presidential run.

The Dubai Connection: How Bill Cashed In

One of the Clintons’ strengths is their ability to play two sides of an issue. Sometimes this is called “triangulation.” Sometimes it is called cashing in and demogoguing.

When the Bush administration signed a $6.8 billion contract with United Arab Emirates–owned Dubai Ports World in early 2006, Senator Clinton came out against the accord because, she claimed, it would compromise America’s security and “fiscal sovereignty.” She wrote a letter to Senate Majority Leader Bill Frist insisting that”[t]his sale will create an unacceptable risk to the security of our ports. We therefore request that emergency legislation we are introducing to ban foreign governments from controlling port operations be slated for immediate consideration when the Senate convenes on February 27.”

Meanwhile her husband, who had approved a deal in 1999 allowing control of both ports of the Panama Canal to fall to Hutchinson Whampoa—a company with close ties to the Chinese military—had other ideas.

Mr. Clinton enjoyed a lucrative relationship with Dubai. Mrs. Clinton reported in her own senatorial disclosure forms that her husband had earned $600,000 giving speeches there.14 The UAE had also contributed between $500,000 and $1 million to his presidential library in Arkansas. Furthermore, “Yucaipa, an American company that has Bill Clinton as a ‘senior adviser’ and pays him a percentage of its profits, formed a partnership with the Dubai Investment Group to form DIGL, Inc., a company dedicated to managing the sheik’s personal investments,” according to former Clinton adviser Dick Morris.

In fact, as Senator Clinton was accusing the White House of “trying to hand over U.S. ports” to unreliable foreigners and exclaiming that “we cannot concede sovereignty over critical infrastructure like our ports,” her bedmate was trying to land his former press secretary, Joe Lockhart, a job lobbying the U.S. government on behalf of DP World—the very company slated to take over the six U.S. ports. Veteran journalist Robert Novak reported, “according to well-placed UAE sources, the former president made the suggestion [to hire Lockhart as a lobbyist] at the very highest level of the oil-rich state.” Lockhart ultimately failed to land the job; UAE officials claim he asked for too much money, while Lockhart maintains he declined the position.

During the Dubai ports controversy, Mr. Clinton publicly extolled the UAE as a “good ally to America.” Moreover, Dubai officials consulted with Mr. Clinton as to how to ensure that the ports deal went through. On March 2, 2006, Clinton’s spokesman told the Financial Times, “the Dubai leaders called him [Mr. Clinton] and he suggested that they submit to the full and regular scrutiny process and that they should put maximum safeguards and security into any port proposal” to ameliorate congressional concerns over the deal.

The following day, the New York Post reported that Mrs. Clinton was unaware that her husband was advising the very Dubai officials she was warning would undermine our security and fiscal sovereignty. She stammered, “That’s . . . I mean, as far as I know, he supports my position and has said so publicly.”