Hillary, Hollywood and the Vatican, The First Post [United States], DATA

Hillary, Hollywood and the Vatican

The First Post [United States]
June 20, 2007

http://www.thefirstpost.co.uk/index.php?storyID=7382&p=2

philip delves broughton on the potential scandal that links a young Hollywood actress with Bill and Hillary Clinton

Just about the last thing the Clintons need now is a financial scandal. Last week, they liquidated as much as $25m worth of stocks in blue chip American companies to protect Hillary from accusations of corporate favoritism during her campaign for the presidency.

Now, the investment fund Bill is involved in is suing a property firm with close ties to the Vatican, accusing its chief executive of frittering away the company's money on his movie star girlfriend.

The Follieri Group was set up in 2003 by a wealthy Italian businessman, Pasquale Follieri, and his son Raffaello, with a unique business plan. It would take advantage of its special ties to the Vatican to buy up property from Catholic dioceses in the United States. Many of these dioceses were financially devastated after having to pay hundreds of millions of dollars in settlements for child abuse cases and seeing their congregations dwindle.

Anne Hathaway said Raffaello Follieri was the first ‘real man’ she had known

The Follieri Group leapt into the breach, promising to redevelop the property in a 'socially responsible' manner and in accordance with Catholic principles, building schools, low-cost housing and clinics. It would then use part of the profits from these ventures to fund a foundation providing scholarships and health care for Catholic children in the US and abroad. The group's best asset was a senior adviser whose uncle was Cardinal Sodano, the Dean of the College of Cardinals, the number two to the Pope.

The 29-year-old Raffaello set to work, installing himself in an apartment in Trump Tower and becoming a fixture of New York society. Soon after his arrival in the city, he began to date Anne Hathaway (left, with Raffaello Follieri), the actress who starred in The Devil Wears Prada. The two of them made a trip to Nicaragua in 2006 to donate hepatitis A vaccines to children. Hathaway said Follieri was the first "real man" she had known and that the charity work had helped her realise how trivial her life had been. She told Marie Claire: "If I have one regret in life, it's how much time I spent feeling sorry for myself when I have everything."

Among the backers attracted to Follieri's venture was Ron Burkle (right), a Californian billionaire, and one of Bill Clinton's closest friends. The Clintons have made frequent use of Burkle's private jet and his Beverly Hills home to host fundraising events. The only financially-related job Bill Clinton took after leaving the White House was as an advisor to Burkle's Yucaipa Companies, a group of funds which made its name investing in distressed economic areas, working with local businesses, government and unions to turn a profit in difficult situations. Burkle also recently bid for the Los Angeles Times.

The suit filed by Burkle alleges that Follieri wasted some of the $55m on private jets for himself and Hathaway

On paper, Follieri and Burkle seemed a perfect match. Both led a visible social life and appeared to make their money by investing in beaten-down communities and helping them revive. But according to the Wall Street Journal, Yucaipa quickly became suspicious of Follieri's accounting and business tactics.

Follieri had tried to grease the wheels with the Catholic hierarchy in the US by delivering fruit baskets to the hotel rooms of 350 bishops at the National Conference of Catholic Bishops in Los Angeles, but the bishops rebuffed him. His plan to buy property has not gone smoothly, with many dioceses holding out for higher bids and paying little heed to the Follieri Group's Vatican ties.

The suit filed by Burkle against Follieri alleges that Follieri wasted some of the $55m invested by Burkle on private jets for himself and Hathaway, shopping at designer stores, a personal chef, hotel suites and pampering for their Labrador, Esmerelda.

Worryingly for the Clintons, who know better than anyone the risk of even the appearance of impropriety, the Follieri Group claims the whole matter is just a question of "a little money that needs to go back in the right pot".