The Alexis Nexus
York, Byron
Herman didn't just sit in on the gatherings; she helped arrange some of the more than loo "coffees" that were at the heart of Bill Clinton's plan to use the White House as the main fundraising tool...
...However, we will aim to escalate the level of surrogate activity in the six weeks preceding each primary...
...Herman & Associates...
...Herman, whose title was White House director of public liaison —and who is now Bill Clinton's choice to be labor secretary— joined an impressive lineup...
...During those years, Jackson used PUSH to threaten major corporations with boycotts unless they adopted quotas for black hiring and contracting—and also contributed to PUSH and related organizations...
...Mendelsohn paid Herman's company $600,000 to design an affirmative action plan for Federal Triangle...
...A few years earlier, he had solved his problems with another big development by giving equity cuts to several of Mayor Barry's closest cronies...
...In persuading African Americans to support the President in 1996, we have to craft the "right message...
...The Washington Post reported that some were asked to put up $1,000 in return for interests that were worth hundreds of thousands of dollars...
...There is no doubt her connections to Brown and the DNC helped her tremendously, for example, in the Federal Triangle deal...
...And an unsecured loan between $15,000 2A11 in all, her 1992 income came to at least $209,618, and, given the vagueness of financial disclosure forms, possibly much more...
...I always had Alexis participate in our presentations because she did such an excellent job of articulating our affirmative action program," Mendelsohn says...
...The standoff put Bill Clinton in a tough spot: he had to choose between two of his most valued constituencies, organized labor and African Americans...
...Thus, in the 1996 Presidential election, we might find that some blacks may well be more inspired to go to the polls in greater numbers to vote against the "enemies of civil rights" than for the Democratic candidate...
...The committee decided to hold off on scheduling confirmation hearings until Herman responded to a set of detailed questions about her role in the fundraising and connections to John Huang and other figures in the growing scandal...
...Herman & Associates be hired to "monitor" the agreement...
...Today it is a massive granite-faced structure that rivals the massive granite-faced government office buildings across the street...
...Although some Republicans privately said they had concerns about the Green-Herman contract scams and the Federal Triangle deal, they doubted those would be enough to cause Herman any serious problems...
...More business for Alexis...
...Her next statement indicated that she had switched to a revolving credit card, again with a monthly balance between $10,000 and $15,000...
...At that point Republican sources began to talk openly of problems with the nomination...
...So he turned again to Alexis Herman...
...News 6 World Report, Brown also directed that DNC money be deposited in Adams National Bank, where Herman served on the board of directors.2 It wasn't long before there were reports that Herman was taking part in the big spending that characterized Brown's tenure at DNC...
...I'm sorry, I do not talk to the press," she said...
...As part of her plan, Herman created another group, "African Americans for Clinton-Gore '96," and made Ernest Green—remember him...
...BYRON YORK is an investigative writer for TAS...
...Her first statement in 1993 listed an American Express bill of between $10,000 and $15,000...
...Herman & Associates (the statement says the loan was repaid by 1994...
...Herman's financial disclosure form says she was paid $144,681 in 1992—the year in which she planned and ran the New York convention...
...Department of Labor are untrue...
...In response to The American Spectator • March 1997 25 a written question on the subject, a White House spokesman says only that "A.M...
...OUTREACH FOR DOLLARS Given Herman's connections, combined with her experience in Democratic fundraising— not to mention her eye for a sharp deal—Bill Clinton must have thought he had found the perfect person for the job of White House director of public liaison...
...Some in Congress thought it was inappropriate for a top DNC official—who wielded all sorts of DNC power, like the power to distribute party money to, say, the political campaigns of members of Congress—to lobby for her own business...
...And the third was to "identify a cadre of contributors in the black community that will work for the President's re-election...
...Developers quickly realized that friends of Marion Barry were excellent candidates for inclusion...
...And her former assistant, Gloria Gutierrez, now a top Commerce Department official, abruptly terminated a phone inquiry on the subject...
...I never asked her to do any lobbying," he says...
...What you need if you're going to develop a huge project like [Federal Triangle] is a politically connected minority contractor," says one observer intimately familiar with the commercial real estate scene in Washington...
...Ostensibly hired to devise an affirmative action plan for the developers, Herman found herself traveling to Capitol Hill to lobby for Mendelsohn's team...
...Today, they are reluctant to say just what she did for their companies...
...Another Republican adds, "She may be a better nominee than Harris Wofford, who might be the backup if her nomination is tubed...
...For example...pre-election focus groups of black voters in Virginia revealed that the main anger of blacks was directed at their number one enemy—Governor George Allen...
...That is, they will be helping to educate the African American public and key interest groups about Clinton Administration accomplishments—not campaigning...
...Herman & Associates...
...But the question is: Did she invest any money in the project...
...All that changed when revelations of Herman's fundraising and political activities came out in late January...
...This was an affront to labor, which only spent $35 million on the Democrats last year...
...Powerful Democrats on the Hill, including Ted Kennedy, the ranking minority member on the Labor and Human Resources Committee—backed former Pennsylvania Senator Harris Wofford instead...
...Herman improperly benefited from her work as head of the Women's Bureau at the U.S...
...In January 1996, Herman received a memo from Harold Ickes directing her to develop a "national plan" and a "state plan" to win more black votes for Clinton...
...Herman & Associates several months after joining the White House staff...
...BUILDING A FORTUNE By the mid-1980's, Herman had branched out from diversity consulting to take part in several Washington real estate deals...
...In addition, Herman wrote that it was critical that the White House know which contributors were most deserving of "personal attention beyond...invitations to White House affairs...
...Ousted by the Reagan victory in 1980, she formed her own business, first known as Green-Herman and later as A.M...
...Her statements also reveal a seven-year car loan between $15,000 and $50,000...
...I think it may have been some work in the human relations area," said a spokeswoman for Procter & Gamble who was unable to provide any other details...
...This one also included the president and some of those who had would attend the next day's meeting—plus more heavy donors, among them Pauline Kanchanalak, the mysterious Thai-American businesswoman whose family donated more than $526,000 to Democrats in recent years (much of that money was later returned by the DNC...
...Mixing money and politics is not something Herman learned in the Clinton White House...
...In addition, Herman at times carried mortgages on four houses: the Washington condominium where she lived, a rental house in a wealthy Washington neighborhood (although she called the home a rental property, listing its value at between $25o,000 and $5oo,00, she said she received no income from the house), a vacation home at a resort in Basye, Virginia, and a house in her hometown of Mobile, Alabama...
...Herman began her strategy with the assumption that Clinton had the black vote in the bag...
...And she listed six companies that, like Burger King and Procter & Gamble, paid her diversity consulting services fees of at least $5,000 each...
...Those contacts even included Brown-like trade missions...
...She was something more than that...
...the chairman...
...mayor—Marion Barry—who had his own say in the Corporation's decisions...
...When he chose the latter, it is safe to say that many in labor were incensed...
...Herman said the transaction —which she placed between $5o,000 and $ioo,000 — took place on December 6,1993...
...The developers gave her an equity stake in the project-3.3 percent of the deal—which Herman later valued at between $500,000 and $1,000,000...
...Herman gave her African American Working Group three primary goals...
...I remember their affirmative action plan did not appear to have much substance," says a member of a team that bid for the contract but lost...
...Herman's financial disclosure statements reveal the kind of extensive credit card bills that faced the DNC...
...She wrote that as "an enticement to contribute," a group of well-to-do blacks would be invited to join yet another newly created organization, the African American Leadership Forum...
...questions that exist about her entire career in Washington...
...Herman & Associates...
...The idea of turning Pennsylvania Avenue into a grand boulevard began in the Kennedy administration, where its primary proponent was a young Labor Department official named Daniel Patrick Moynihan...
...Her actions have caused concern on Capitol Hill, where the Senate Labor and Human Resources Committee will hold confirmation hearings...
...She is simply the best...
...In the 1980's, Ernest Green left the firm (he is now managing director at Lehman Brothers in Washington) and Herman changed the name to A.M...
...And the month before, on December 13, 1995, Herman attended yet another coffee, again with the president, Fowler, White House political honcho Harold Ickes, and major donors like Leonard Barrack, a lawyer from Philadelphia who contributed $134,000 (and got a night in the Lincoln bedroom), and F. Kenneth Bailey and John Eddie Williams, two Texas lawyers who gave $457,700 between them...
...It inoculates you from a whole variety of problems" with the local and federal governments...
...Herman's business partner was another departing Carter Labor Department official, Ernest Green...
...Herman & Associates...
...In a later financial disclosure statement, Herman said that the buyer had assumed the mortgage, although real estate records indicate that the buyer took out his own mortgage in a different amount from Herman's original mortgage...
...But real estate records in Washington indicate that the sale actually took place on January 31,1995, and was for $366,000...
...Herman declined to answer a written question on the subject submitted by TAS...
...The pause came when Republicans put Herman's confirmation hearings on hold so they could investigate her political activities...
...She recruited staff from her own office plus others elsewhere in the government (including Rodney Slater, the head of the Federal Highway Administration who is Clinton's choice to be Secretary of Transportation...
...One lists her interest in something she calls the 'Western Assoc...
...She was worth the money," says a Washington real estate observer, "whether she did any work or not...
...The system required that face partners be involved, and she was there to provide the face...
...But if critics focus single-mindedly on Herman's role in the White House fundraising machine, they might overlook the serious The American Spectator • March 1997 23 On Friday, January 26, 1996, at 8:3o in the morning, Alexis Herman attended one of the now-infamous "coffees" held in the Map Room of the White House...
...It will take a smoking howitzer to cause her any trouble...
...In the end, it doesn't matter how Herman ended up with her chunk of Market Square...
...She was connected to Ron Brown, to Jesse Jackson, and through them to Marion Barry," says the real estate observer...
...During the Christmas-New Year holiday at the end of 1992, for example, the magazine reported that Herman spent $6,015 for limos, which included $754 in tips for her driver and $570 in car-phone bills...
...Herman has also known Jackson for years...
...When it came time to bid for the contract, Mendelsohn knew that the Pennsylvania Avenue Development Corporation would demand minority participation...
...And, according to an article in U.S...
...The president was there, as were Senator Christopher Dodd, co-chair of the Democratic National Committee, Don Fowler, the other DNC co-chair, Marvin Rosen, the party's top money-raiser, and big contributors like Dirk Ziff, a New York investment banker who gave $411,000 to the Democrats in 1995 and 1996...
...For Herman, Market Square was an even richer deal than Federal Triangle...
...Herman even listed $5,000 in income from a "charitable raffle" put on by the Baltimore alumni chapter of the fraternity Kappa Alpha Psi...
...Ptrshp...
...she valued her personal interest in the partnership at between $500,000 and $1,000,000...
...She worked closely with Ron Brown—Jackson's campaign manager—and joined the Democratic National Committee when Brown took over the next year...
...The party job had several benefits...
...And for the consulting work, Herman was simply required to list the companies who had paid her "compensation in excess of $5,000...
...Lobbying or not, Mendelsohn's team won the bidding...
...Nearly every national labor leader opposed her, and several believed she was not qualified for the job...
...she helped arrange some of the more than loo "coffees" that were at the heart of Bill Clinton's plan to use the White House as the main fundraising tool in his campaign for re-election (the coffees raised a total of $27 million...
...By the time the contract competition was in its last stages, Herman had been hired by Brown to be the deputy chairwoman of the Democratic National Committee...
...There are a lot of members who are very uneasy about her confirmation," says a source within the Republican leadership...
...Today there are serious concerns about whether Herman's fundraising and minority vote-getting activities violated the Hatch Act, a law that bars some types of political activities—and specifically forbids fundraising—by administration officials...
...That meant developers—a mostly white group—would have to include minority partners in a project if they hoped to have any chance of winning a contract...
...Herman & Associates...
...She did say that she took a $21,974 "distribution" from the firm...
...Scandal spokesman Lanny Davis repeatedly told reporters that "there was no fund-raising activity organized by the White House or the OPL [Office of Public Liaison...
...Mendelsohn denies he used Herman's clout...
...Herman also recommended that the White House field a team of "surrogate speakers...
...Work was slow, but by the time of the Nixon administration Moynihan and other like-minded Washington insiders had succeeded in creating a quasi-government entity called the Pennsylvania Avenue Development Corporation...
...Ever since being elected mayor in 1978, Barry had made it clear that developers would have to "pay to play...
...Ernest Green did not return several calls asking for comment...
...Even though that description nicely captures the jargon of the diversity business, it doesn't really present an accurate picture of what Green-Herman actually did...
...Other corporations that bought Herman's services included Procter & Gamble, KPMG Peat Marwick, and Levi Strauss...
...It is difficult to establish whether that information is correct...
...Green is something of a civil rights legend, having been one of the "Little Rock Nine," the first black students to attend Central High School after the Brown v. Board of Education decision in 1954...
...Developers had to please the presidentially appointed members of the Corporation, but they also had to please the D.C...
...A.M...
...During her time with the DNC, she remained head of A.M...
...Thank you [hang up...
...Her political clout went up a few notches...
...In all, she estimated A.M...
...Did she perform some work equal to 3.3 percent of Market Square...
...They became what are known as "face partners," which refers to minorities who are given a piece of a big real estate deal but play little role other than giving the undertaking an appearance of diversity...
...As for her role in the White House fundraising "coffees," administration officials insist that Herman was not doing anything improper...
...Both entries refer to Herman's role in controversial, expensive, and highly political construction projects...
...We do not discuss the details of work consultants provide to us," said a spokeswoman for KPMG Peat Marwick...
...If Republicans want to change that system, confirming Alexis Herman will just make the job harder...
...The problem was, not enough of them voted, which meant that "turning out the vote will be the name of the game...
...It could have been far more...
...She was wired...
...Whether it was a goal or a suggestion or a requirement I don't recall," Mendelsohn says, "but [the Corporation] made it known to us that they were very interested" in adding minority partners to the project...
...Concerned about the Hatch Act, Herman wrote that the speech-making, as she envisioned it, would not technically qualify as campaigning: Agency surrogates will carry out these activities as part of their normal job duties in 1996...
...The Federal Triangle project was reminiscent of Herman's role in an earlier Pennsylvania Avenue project...
...Before she ever raised a dollar for Bill Clinton, Alexis Herman developed an impressive ability — sharpened by her longtime association with her two mentors, Jesse Jackson and the late Ron Brown—to exploit Washington's network of racial set-asides and insider deals to make herself wealthy...
...A decade ago, Market Square was an empty lot on the north side of Pennsylvania Avenue between the Capitol and the White House...
...The building is the last remaining project in a 3o-year campaign to fill several gaps along Pennsylvania Avenue...
...others were given a cut in return for nominal work...
...Herman & Associates...
...The other refers to her relationship with a company called the F1 PM Partnership...
...Green was pushing the money out the window so fast that he sent telegrams to recipients—largely unions and interest groups that had supported Carter's re-election campaign—telling them to start spending the cash even before contracts could be signed...
...Ernie [Green] and Alexis formed a company to develop and implement affirmative action programs, and I began using them from the beginning...
...The last mission Herman set for her African American Working Group was simple: attack Republicans...
...Its semi-circular colonnade fronts one million square feet of office space, shops, restaurants, and condominiums...
...The party also paid a heavy price for her taste in limousines...
...The main developer of Market Square was another politically connected businessman named Herbert Miller...
...That strategy could be too clever by half...
...28 THE COP's CALL Before anyone thought she might face a confirmation fight, Herman had to work hard just to win her nomination to be Labor Secretary...
...Ptrshp" in her financial disclosure report is a short way of referring to Herman's interest in the development partnership that built Market Square, a few blocks down the street from Federal Triangle...
...26 March 1997 • The American Spectator and $5o,000 from her business, A.M...
...FTPM Partnership" is the partnership that is now finishing the massive Federal Triangle building two blocks from the White House in downtown Washington...
...She would be an extremely weak labor secretary, which wouldn't be a bad thing necessarily," one Senate aide says...
...The phrase "Western Assoc...
...In the words of one glowing profile from the time, their firm specialized in "organizational effectiveness and developing corporate strategies for diversity, multiculturalism, career management, minority/disadvantaged business enterprise, community and public relations, and image enhancement...
...It was a nifty deal, and it got Green-Her'Jackson, Herman, and Green go way back together...
...LIVINC IN STYLE In 1988, during the height of her involvement in local real estate projects, Herman took time out to work for Jesse Jackson's presidential campaign...
...The U.S...
...whatever the reason, Herman's nomination looked safe...
...That's where Alexis Herman came in...
...Republicans who underestimate Herman forget she was a major part of the Clinton re-election machine, which could hardly be called weak or ineffective...
...It was during that time that she began to take advantage of the affirmative action system that governs how business is done in Washington...
...As she had with the original PUSH deal, Herman continued to benefit from her relationship with Jesse Jackson...
...She wrote 24 March 1997 • The American Spectator that she received between $50,000 and $100,000 for the company, but did not reveal to whom it had been sold...
...In response to written questions from TAS, Herman declined to give any specific answers, but a White House spokesman said that "Ms...
...By the time Herman filed her next financial disclosure form, in May 1994, she said she had sold A.M...
...I think for any body who's a Democrat it's an appalling appointment," says one activist...
...And he made sure that Herman's face was up front and center when it came time to take his case before the Pennsylvania Avenue Development Corporation...
...They had a couple of face people, but it did not involve hiring a lot of minority contractors...
...I knew Alexis when we were both in the Carter administration," Mendelsohn says...
...Herman & Associates' value at between $25o,000 and $5oo,000...
...Curiously, on her financial disclosure form, Herman said she received no salary from A.M...
...By all accounts the process of buying the land and giving out contracts was highly political, even by Washington standards...
...A few years after the company was formed, a General Accounting Office study revealed that in the last days of the Carter administration Ernest Green rushed to spend more than $ioo million in federal grant money before the Republicans could get their hands on it...
...The Corporation had the power to use government money to buy land along the avenue and hold competitions among developers who bid to build grand projects in the place of run-down storefronts...
...Ott March 1997 • The American Spectator...
...It would be a violation of the Hatch Act for Herman to devote an extensive amount of time to the Clinton campaign...
...They are not required to reveal exact figures...
...They would be administration officials—including herself—who would spread Clinton's message before dozens of black-oriented conventions, meetings, and other gatherings around the country...
...According to the financial disclosure form she filed upon entering the White House in 1993, Burger King was among the companies that paid significant "diversity consulting" fees to A.M...
...In the end, Republican sources say, the Senate leadership will have to decide: Should they accept a slick operator like Herman, or should they sink her nomination and take the risk that a more effective liberal candidate will take her place...
...The mortgages totaled at least $250,000 and perhaps as much as $600,000...
...Herman & Associates' role in assisting the Federal Triangle project was proper...
...The first thing Herman did was to put together the White House "African American Working Group...
...Specific pieces of campaign literature were then crafted to highlight this fact...
...First, the money was good...
...Once in the White House, she sold her rental house to a friend, but there are questions about the circumstances of the sale...
...As late as the 197o's, the street, which was lined by grand government buildings on the south side, had stretches of shabby buildings along the north...
...It's something she's been doing all her public life...
...We really don't discuss our contract or business relationships," a spokesman for Levi Strauss said...
...It is unclear whether Herman was paid for staging the raffle or winning it...
...Still, it is important to remember that at first Herman's confirmation prospects looked quite good...
...it also created new business for her at A.M...
...Contributing members would "be afforded the opportunity to interact with senior Administration officials...through policy briefings, luncheons, and workgroups...
...One of those contracts, for $2 million, went to Jesse Jackson's Operation PUSH.' Then, when Green and Herman left the government and founded their company, one of their first contracts came from Operation PUSH...
...Perhaps Republicans didn't think Herman's background presented any serious questions, or perhaps they were afraid to appear to be hectoring a high-ranking black woman or violating the spirit of "bipartisan cooperation" on Capitol Hill these days...
...Herman herself refused to answer a written question on the subject submitted by TAS...
...By the next year,1995, the monthly balance had grown to between $15,000 and $50,000, where it remained in 1996...
...See "Come Fly With Me," opposite...
...Jim Jeffords is a bleeding heart Republican," said one observer of the Labor and Human Resources Committee chairman who will preside over Herman's confirmation hearings...
...The District of Columbia Department of Finance and Revenue, which keeps records of business licenses and transactions, has no record of any sale involving A.M...
...But the DNC position didn't just pay Herman a good salary...
...News also reported that the DNC moved Herman into a $4,000-a-month apartment on Central Park South while she planned the convention, and the magazine said the DNC paid several thousand dollars to cover expenses on Herman's personal American Express card...
...When a company—Jackson's targets included Coca-Cola, Burger King, and the Southland Corporation, which owns 7-Eleven stores—gave in and signed a "covenant" with Jackson, the reverend would suggest that A.M...
...There are plenty of unanswered questions, and if she gets sucked up into the whole aggressive White House fundraising situation, it's going to be cause for pause...
...The first was The American Spectator March 1997 27 to push Clinton's record...
...And Ernest Green's name surfaced when the Washington Times reported that he played a major role in bringing a notorious Chinese arms dealer to the White House—and made a large contribution to the DNC immediately after the meeting...
...Yet many black leaders—chief among them Jesse Jackson—strongly supported Herman...
...Certainly, those opponents thought, it wasn't her affirmative action plan that won the day...
...THE SET-ASIDE SET Herman has been a major figure in black Washington for twenty years...
...And by the time she moved to the DNC, the competition for the Federal Triangle contract had become a fierce battle involving the city government, the White House, and Congress...
...Some felt that Herman had helped in a political fix that steered the job to her team...
...Developers were also required to submit an affirmative action plan guaranteeing that a certain amount of the sub-contracts involved—sometimes as high as 35 percent—would go to minority firms...
...News story reported the DNC paid several thousand dollars for expenses run up by Herman, including charges for home decorating...
...For Market Square, Miller's company worked in association with Mendelsohn...
...In the job — a loosely defined position that in large part involved maintaining relations with the liberal interest groups that supported Bill Clinton for president— she could make use of all those contacts gained through Brown, Jackson, and the diversity business...
...Herman & Associates is long dead and buried...
...And she was also connected to Bob Mendelsohn, who was part of the development team that won the Federal Triangle contract...
...Herman's career proves she knows how to work the system...
...And they say that government resources were not used to devise and implement the plan (although the White House did reimburse the taxpayers $917 for the computers used to write Herman's plan...
...So it's not surprising that Clinton also turned to Herman when the time came to draft a plan targeting minorities for special voter "outreach" and fundraising...
...man off to a good start...
...Two lines of her financial disclosure statement reveal particularly intriguing transactions...
...Herman & Associates...
...In addition to her help in the money chase, Herman—one of the highest-ranking blacks in the Clinton White House—snagged another top job in the Clinton campaign when she was put in charge of an unprecedented "outreach" program targeting a whole rainbow of voting groups: African Americans, Hispanics, Asians, the disabled, and others...
...The second was to create get-out-thevote projects...
...Contrary to Herman's own memo cited above, White House officials insist that all this political strategizing and campaigning was done on Herman's own time—in addition to her full-time job as head of the Office of Public Liaison...
...Originally from Alabama, she first joined the federal government in 1977 as Jimmy Carter's choice to head the Women's Bureau in the Department of Labor...
...She created a blueprint for a seamless operation in which the White House, the DNC, and the Clinton/Gore Reelection Committee would work together to win the black vote...
...Just the day before, on the 25th, Herman took some time out of her schedule for a 4:oo p.m...
...But other developers who bid on the contract became angry when they learned that Mendelsohn's winning bid was significantly higher than the losing proposals...
...Herman declined to provide any specific answers to written questions submitted by TAS, but a White House spokesman said that "any allegations that Ms...
...Herman's personal financial situation has been appropriately and properly disclosed...
...Mendelsohn responded to the question by saying, "I don't think it's material," but added that Herman might have gotten her stake in return for developing and overseeing an affirmative action plan for the project...
...Executive branch financial disclosure forms allow officials to list the value of assets within broad categories, like $25o,000-$5oo,000...
...African American voters," she wrote, "are among the most consistent and loyal supporters of the Democratic party...
...It is the biggest federal building project since the Pentagon, and it has a price tag to match: an estimated $720 million dollars, which is twice the original estimate and likely to rise before the final cost is tallied (in a deliciously perverse turn of events, this symbol of expanding government has recently been re-named the Ronald Reagan Building...
Vol. 30 • March 1997 • No. 3
