Lawyer's advice helped Clintons earn $100,000

March 18, 1994|By New York Times News Service

WASHINGTON -- Starting just before Bill Clinton was elected governor of Arkansas, Hillary Rodham Clinton made about $100,000 in one year in the commodities market with the help and advice of a friend who was the top lawyer for one of the state's most powerful and heavily regulated companies.

The investments, made in a commodities trading account that was opened three weeks before Mr. Clinton was elected governor in 1978, substantially altered the finances of the Clintons.

At the time, Mr. Clinton was attorney general. He and his wife were rising stars in Little Rock whose salaries were modest by the standards of their peers.

The proceeds helped them to buy a home, to invest in securities and real estate and eventually to provide a nest egg for their young daughter, according to the couple's associates and a review of the family's financial records.

But the trades, which emerged during a two-month examination of the Clintons' finances by the New York Times, also left them in the position of having relied significantly on the help of one of the state's premier power brokers, James B. Blair, a Clinton confidant who at the time was the primary outside lawyer for Tyson Foods Inc., of Springdale, Ark., the nation's biggest poultry company.

During Mr. Clinton's tenure in Arkansas, Tyson Foods benefited from a variety of state actions, including $9 million in government loans, the placement of company executives on important state boards and favorable decisions on environmental issues.

Even today, critics in Congress and elsewhere have complained that the Clinton administration is too close to Tyson Foods and the poultry industry it dominates, sparing it from some of the tougher federal inspection guidelines enacted against the meat industry.

Mr. Blair, who later became Tyson's general counsel, and his wife, Diane, were appointed to important government posts by Mr. Clinton as governor and president.

In a written statement, the Clintons' personal lawyer, David Kendall, said yesterday that Mrs. Clinton traded in commodities futures "with her own funds and assumed the full risk of loss."

"She did so through two different trading accounts in her own name in Little Rock and Springdale, Ark.," he said. "Mrs. Clinton reported gains and losses on her tax returns as appropriate."

Mr. Blair, in telephone interviews Wednesday and yesterday, confirmed that he encouraged Mrs. Clinton to invest in the normally risky commodity markets and used his investing skills to help guide her through a series of lucrative trades.

Mr. Blair and administration officials designated to discuss the matter -- but who would speak only on condition of anonymity -- said that Mrs. Clinton put up the stake with which she began trading. The officials would not say how much money Mrs. Clinton put at risk.

Lisa Caputo, Mrs. Clinton's press secretary, said in a statement last night: "Mrs. Clinton consulted with numerous people and she did her own research. This was her own risk; the commodity investments were her own responsibility."

The administration officials said that Mrs. Clinton studied financial data, including some in the Wall Street Journal.

John Podesta, a White House spokesman, said last night that, "Hillary and Jim were friends; he gave her advice. There was no impropriety. The only appearance is being created by the New York Times."

Mr. Blair, who himself made several million dollars trading commodities, said he saw no conflict of interest because he helped Mrs. Clinton as a close friend, not because of the position held by her husband.

Speaking of the Clintons, he said: "Do they have to go weed their friends out and say they can only have friends who are sweeping the streets? They have friends who are high-powered lawyers. They have friends who write books, who write poetry."

Mr. Blair and the administration officials estimated her profits at roughly $100,000. The officials said she opened her trading account in mid-October 1978, three weeks before Mr. Clinton was elected by a 63 percent to 37 percent vote.

She got out of the market on Oct. 17, 1979, just as the rising market in cattle futures that she had profited from was collapsing.

As governor and during the 1992 presidential campaign, Mr. Clinton was forthright in defending the assistance state government gave to Tyson Foods, which is among Arkansas' largest employers, saying that it was good for the state's economy.

Archie Schaffer, director of media, public and government affairs for Tyson, denied that that Mr. Clinton did any special favors for the company or the Arkansas poultry industry.

"I can tell you that I disagree totally with any suggestion that the Clinton gubernatorial administration gave the poultry industry or Tyson any breaks," he said. "That's just nonsense." Mr. Schaffer said he knew nothing of the commodity trading.

The history of the commodities trades casts a new light on the Clintons' personal finances and on their relationship to the poultry industry and to Mr. Blair.

The trades have never been publicly disclosed. During the 1992 presidential campaign, the Clintons and their aides gave conflicting accounts when asked to explain where the couple got the money to make a $60,000 down payment on a house in 1980. Clinton aides declined during the campaign to release their tax returns for the late 1970s and did so again yesterday.

When the question of the down payment first arose, the campaign said it came from an investment of Mrs. Clinton, which the officials declined to describe.

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