Posted by Jed Lewison on Tue Jan 15, 2008 at 7:20 PM Pacific

Clinton, demanding transparency, fails to disclose chief campaign strategist's ties to UAE wealth funds

During Tuesday night's Democratic presidential debate, Hillary Clinton renewed her call for "aggressive" measures to reign in sovereign wealth funds, the investment funds owned by oil-producing states like the United Arab Emirates and Kuwait. She said she was "very concerned" about the multi-trillion dollar funds which are now buying substantial shares of American enterprises such as Citigroup and Merill Lynch.

Clinton, who first raised this issue six weeks ago, said the funds "need to be more transparent," adding "we need to have a lot more control over what they do and how they do it."

Despite Clinton's tough talk about transparency, she failed to disclose that her chief campaign strategist has close business connections with sovereign wealth funds owned by Abu Dhabi and Dubai, two small -- but oil-rich -- emirates located on the Persian Gulf coast.

The Clinton strategist, Mark Penn, is worldwide CEO of Burson-Marsteller, one of the most powerful lobbying and public relations firms in the world.

Burson-Marsteller represents sovereign wealth funds in at least two emirates

Last August, the Abu Dhabi Investment Authority, a sovereign wealth fund, hired Burson-Marsteller to represent its global interests.

Three months later the fund invested $7.5 billion in Citigroup, giving it a 4.9% stake in Citigroup and making it the firm's largest shareholder.

Before Abu Dhabi's investment, Saudi Prince Al-Waleed bin Talal was Citigroup's largest shareholder, a title he will likely reclaim after Tuesday's announcement that he will expand his 4.4% stake in the company.

In addition to the Abu Dhabi Investment Authority, Burson-Marsteller also represents at least two other Dubai-based sovereign wealth funds. In late 2006, Penn's firm formed an exclusive partnership with JiWin Public Relations, a Dubai-based public relations firm representing more than twenty firms, including several sovereign wealth funds owned by the government of Dubai.

According to the partnership agreement, "JiWin will work with Burson-Marsteller clients across the United Arab Emirates, Gulf Cooperation Council States (GCC) and the Levant."

In return, "Burson-Marsteller will support JiWin clients as they seek to expand to global markets."

At the time, Penn welcomed the deal enthusiastically. "We are excited about our new partnership with JiWin and welcome them into our global network," he said. "The UAE, GCC and the Levant all hold compelling prospects for our business and our clients and we look forward to further expanding our broad range of public relations services into this region."

In Dubai, Burson-Marsteller and JiWin now share office space. Their clients include Dubai Group and Dubai International Capital, which owns 3% stakes in both Airbus and Sony, among other companies. After completing the acquisition of a British company with U.S. factories, Dubai International Capital announced plans to open an office in the United States.

Sovereign wealth funds are a $1.6 trillion component of a "petrodollar investment cache" that has reached $4 trillion globally, fueled by skyrocketing oil prices and expected to continue growing rapidly. From 2002-2006, oil producing states from the Persian Gulf invested $300 billion in the United States, according to published reports. The pace of investment is accelerating. In Las Vegas, for example, Dubai World recently aquired half of MGM Grand's CityCenter project.

Penn: Working for Hillary "good for business"

In addition to his work as head of a lobbying and polling firm, Penn has been a senior political adviser to both Bill and Hillary Clinton since the mid-1990s. He was the chief strategist for Hillary Clinton's senate campaigns in 2000 and 2006 and is currently the chief strategist of her presidential campaign.

According to Bloomberg, last year Penn discussed "Workin With Hillary" with his colleagues.

"I have found the mixing of corporate and political work to be stimulating, enormously helpful in attracting talent, and helpful in cross-pollinating new ideas and skills," he said.

"I have found it good for business."

Video from the debate

Clinton's comments came in response to a question from NBC Nightly News anchor Brian Williams. During her answer, Clinton made no mention of Penn's ties to the Dubai-based sovereign wealth fund despite her demand for transparency.

(Update 2:54am: This is a complete update of the original story, with additional details and information.)

Clinton, demanding transparency, fails to disclose chief campaign strategist's ties to UAE wealth funds

During Tuesday night's Democratic presidential debate, Hillary Clinton renewed her call for "aggressive" measures to reign in sovereign wealth funds, the investment funds owned by oil-producing states like the United Arab Emirates and Kuwait. She said she was "very concerned" about the multi-trillion dollar funds which are now buying substantial shares of American enterprises such as Citigroup and Merill Lynch.

Clinton, who first raised this issue six weeks ago, said the funds "need to be more transparent," adding "we need to have a lot more control over what they do and how they do it."

Despite Clinton's tough talk about transparency, she failed to disclose that her chief campaign strategist has close business connections with sovereign wealth funds owned by Abu Dhabi and Dubai, two small -- but oil-rich -- emirates located on the Persian Gulf coast.

The Clinton strategist, Mark Penn, is worldwide CEO of Burson-Marsteller, one of the most powerful lobbying and public relations firms in the world.

Burson-Marsteller represents sovereign wealth funds in at least two emirates

Last August, the Abu Dhabi Investment Authority, a sovereign wealth fund, hired Burson-Marsteller to represent its global interests.

Three months later the fund invested $7.5 billion in Citigroup, giving it a 4.9% stake in Citigroup and making it the firm's largest shareholder.

Before Abu Dhabi's investment, Saudi Prince Al-Waleed bin Talal was Citigroup's largest shareholder, a title he will likely reclaim after Tuesday's announcement that he will expand his 4.4% stake in the company.

In addition to the Abu Dhabi Investment Authority, Burson-Marsteller also represents at least two other Dubai-based sovereign wealth funds. In late 2006, Penn's firm formed an exclusive partnership with JiWin Public Relations, a Dubai-based public relations firm representing more than twenty firms, including several sovereign wealth funds owned by the government of Dubai.

According to the partnership agreement, "JiWin will work with Burson-Marsteller clients across the United Arab Emirates, Gulf Cooperation Council States (GCC) and the Levant."

In return, "Burson-Marsteller will support JiWin clients as they seek to expand to global markets."

At the time, Penn welcomed the deal enthusiastically. "We are excited about our new partnership with JiWin and welcome them into our global network," he said. "The UAE, GCC and the Levant all hold compelling prospects for our business and our clients and we look forward to further expanding our broad range of public relations services into this region."

In Dubai, Burson-Marsteller and JiWin now share office space. Their clients include Dubai Group and Dubai International Capital, which owns 3% stakes in both Airbus and Sony, among other companies. After completing the acquisition of a British company with U.S. factories, Dubai International Capital announced plans to open an office in the United States.

Sovereign wealth funds are a $1.6 trillion component of a "petrodollar investment cache" that has reached $4 trillion globally, fueled by skyrocketing oil prices and expected to continue growing rapidly. From 2002-2006, oil producing states from the Persian Gulf invested $300 billion in the United States, according to published reports. The pace of investment is accelerating. In Las Vegas, for example, Dubai World recently aquired half of MGM Grand's CityCenter project.

Penn: Working for Hillary "good for business"

In addition to his work as head of a lobbying and polling firm, Penn has been a senior political adviser to both Bill and Hillary Clinton since the mid-1990s. He was the chief strategist for Hillary Clinton's senate campaigns in 2000 and 2006 and is currently the chief strategist of her presidential campaign.

According to Bloomberg, last year Penn discussed "Workin With Hillary" with his colleagues.

"I have found the mixing of corporate and political work to be stimulating, enormously helpful in attracting talent, and helpful in cross-pollinating new ideas and skills," he said.

"I have found it good for business."

Video from the debate

Clinton's comments came in response to a question from NBC Nightly News anchor Brian Williams. During her answer, Clinton made no mention of Penn's ties to the Dubai-based sovereign wealth fund despite her demand for transparency.

(Update 2:54am: This is a complete update of the original story, with additional details and information.)

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