03.29.10 11:21 PM ET
Bill Clinton's $20 Million Breakup
In the post-presidency world of the Clintons, no one has been a better or more high-profile Friend of Bill than billionaire Ron Burkle. Burkle helped make the former commander in chief fabulously wealthy, while Clinton helped open doors as the two jetted around the globe on the supermarket and investment titan’s Boeing 757.
But now the symbiotic relationship has ended with great acrimony, three sources with direct access to Clinton tell The Daily Beast, and the cause is the same ingredient that started it: money. Burkle infuriated the former president by allegedly “stiffing Clinton out of $20 million or $25 million,” according to one of the sources.
Suing him—and dragging their dealings and relationship into open court—is an untenable option.
The $20 million in question, a supposed “final payment” in connection with profits from their almost decade-long partnership, was discussed last year by The Wall Street Journal, which reported that Clinton was “walking away” from the money.
One Clinton confidant says a negotiation between the former president and the supermarket magnate went on "for months and months. They compromised and they agreed on different numbers and at the end of the day Clinton decided life's too short. We'll give it up and we'll just sever the relationship.”
Burkle spokesman Frank Quintero responds: “I’m not going to comment on things that aren’t true.” The Burkle camp denied the Clinton sources' version of events, and said that documents would be made available to support their point. Ultimately those documents were not produced prior to publication. The Daily Beast will continue to follow this story and post any relevant documents that are made available.
Burkle met then-candidate Clinton in 1992 and raised tens of millions for the Democratic Party; Green Acres, his 50,000-square-foot mansion in Beverly Hills, was a de facto headquarters for political fundraising. The friendship deepened after Clinton left the White House in January 2001, under fire for last-minute pardons and other scandals, owing millions in legal bills and facing the prospect of raising nearly $180 million for a presidential library in Little Rock, Arkansas.
Burkle helped with all of that. And he hired the former president as an adviser to two domestic investment funds and a partner in a foreign fund. Clinton became Burkle’s rainmaker, while at the same time giving himself, as The New York Times put it, “the potential to make tens of millions of dollars without great effort and at virtually no risk.”
The former president and Burkle were said to be so close that Clinton had his own bedroom in Burkle’s mansion. In 2003, Burkle estimated that he was spending about 500 hours a year with the former president and told Forbes in 2006 that he was with Clinton at least half the time when Clinton was traveling abroad.
On a purely business level, the split between Burkle and Clinton began in 2007, with Hillary Clinton’s run for the White House looming. The relationship wasn’t finally dissolved until she faced confirmation as secretary of State. Clinton’s partnership with Burkle linked him awkwardly with foreign governments—including the ruler of Dubai—and raised other questions about the dealings of Burkle’s Yucaipa Companies. Clinton had received some $15 million since entering into the arrangement in 2002. The other $20 million, Clinton sources say, was supposedly a cut of the profits generated by deals that Clinton had a hand in.
Asked for comment on the rupture, a Clinton spokesman says: “President Clinton and Ron Burkle came to an agreement over a year ago that resolved their business relationship.”
As for a strain on the relationship, Burkle’s spokesman says: “President Clinton and Ron have been friends for years. [Burkle] hasn’t been traveling with him as much since his son has moved in with him,” adding that Clinton and Burkle have spoken within the past week.
It would be interesting to know what they said to each other. The former president’s ire was provoked again this month when Burkle gave an interview to BusinessWeek. Entering into the partnership with Clinton was, in some ways, “the dumbest thing I ever did,” Burkle said. Far from depicting himself as the Clinton associates see him—as a lucky recipient of a key to Clinton’s inner circle—Burkle painted himself as a victim. “If someone wanted to embarrass [Clinton], I got thrown in it, too,” he said. “I got all that for free.”
Perhaps most provokingly, Burkle suggested that he was the one who didn’t have time for Clinton now. Acknowledging that he doesn’t see Clinton as often as he once did, Burkle offered this back-of-the-hand explanation: “Before, every trip with him seemed like a once in a lifetime opportunity. Now I have so many things to do.”
From Clinton’s standpoint, Burkle has everything backward. It was Burkle, the Clinton confidants say, who vastly benefitted from Clinton’s contacts. Burkle’s life was transformed through the glamour of his association with Clinton, they say, and from a business standpoint, Clinton delivered on his promises to Burkle. One says an institutional investor who met with the former president marveled, “I can’t believe [Burkle] got Clinton to pitch for him.”
And the Clinton associates say it was Burkle, a playboy and constant gossip column presence, who was a source of constant embarrassment, including one time that Burkle took a blonde far less than half his age (he’s now 57) to the wedding of one of Clinton’s chief aides, Doug Band. “It was just a ridiculous picture,” says a Clinton friend who attended. “We were all looking around thinking, `Oh, my God.... That's your taste and you're a single guy but to come to such an event with a lot of very respectable people—don't you understand that it reflects very negatively on you?’
Burkle had a messy divorce and in 2006, it became public that he had twice claimed to be the victim of shakedown attempts—one by a onetime New York Post gossip writer to staunch the flow of negative items about him in the paper and once by now-imprisoned private investigator Anthony Pellicano, who was allegedly seeking protection money.
Burkle has his grievances, too. For example, Clinton adviser Doug Band introduced him to Italian real-estate developer Rafael Follieri. In 2007, Burkle sued Follieri, the former boyfriend of actress Anne Hathaway, for misappropriation of funds. The suit was settled when Follieri repaid the money and wrote a letter of apology. Follieri is currently in prison in connection with a scheme to buy up Roman Catholic churches in the U.S.
And while Clinton may be enraged as missing out at what he sees as a deserved payday, Burkle is apparently equally incensed that Clinton is badmouthing him in Democratic circles. Given all the financial, political, and personal elements, the Clinton-Burkle bromance could be the subject of a doctoral thesis—a no-doubt hefty exploration of one of the most complicated and public devil’s bargains in recent political history.
Lloyd Grove contributed to this story.
Kim Masters covers the entertainment business for The Daily Beast. She is also the host of The Business, public radio's weekly program about the business of show business. She is also the author of The Keys to the Kingdom: The Rise of Michael Eisner and the Fall of Everybody Else.