Clinton Praised Controversial GM Plant One Year After Massive Donation

Failed to record massive donation on its public disclosures

Hillary Rodham Clinton walks past a General Motors "Spark" while touring the GM Powertrain plant in Tashkent, Uzbekistan Sunday Oct. 23, 2011
Hillary Clinton walks past a General Motors "Spark" while touring the GM Powertrain plant in Tashkent, Uzbekistan Sunday Oct. 23, 2011 / AP

The Clinton Foundation failed to disclose a contribution valued at $685,000 from the General Motors Foundation made one year before Secretary of State Hillary Clinton visited and praised one of its most controversial operations, according to a Washington Free Beacon analysis.

The foundation has ties to the bailed-out automaker dating back to 2007.

Clinton Foundation records show that General Motors has contributed between $50,001 and $100,000 to the nonprofit. The GM Foundation, which is funded entirely through company support, gave the Clintons 30 GMC pick-up trucks valued at nearly $685,000 in 2010 for Haitian earthquake relief at a time when the company was lobbying the State Department.

Although President Bill Clinton acknowledged GM’s contribution in a February 2010 press release, the foundation failed to record the contribution on its website, breaking a pledge Secretary Clinton made to the Obama White House that it would disclose all donors. The Clintons have faced scrutiny for the charity’s bookkeeping practices concerning foreign donations and announced last week that it would be re-filing several years of tax returns to correct errors.

The foundation did not return request for comment. A campaign spokesman declined comment.

Secretary Clinton visited a GM factory in Uzbekistan a year after the $685,000 donation was made, praising the venture as "a symbol of our friendship and cooperation" and congratulating GM for the "collaboration between Uzbek and American companies."

"The tour was set up by the State Department as part of a bigger Central Asia tour. The request for the tour/visit came to us from the State Department. We accommodated the request," GM spokesman Pat Morrissey said in an email.

Morrissey denied that the contributions were intended to curry favor with the State Department and said that the company never lobbied the department on "any issues surrounding Uzbekistan."

GM Uzbekistan was created in 2007 and operates in partnership with state-run UzAvtosanoat, a company founded by authoritarian president Islam Karimov. Despite objections from human rights organizations over Uzbekistan’s use of forced labor, the State Department named GM Uzbekistan as a finalist for the Award for Corporate Excellence (ACE) in 2011 and 2012.

Robert Hormats, the former under secretary of state for economic growth, energy, and the environment, chaired the ACE committee from 2009 to 2013. He said in a telephone interview that Secretary Clinton had no control over the selection process, that nominations arise from local ambassadors, and that the committee chooses the finalist. Clinton’s sole involvement, he said, was presenting the award to the winner.

"The first time she sees it is when we give the final recommendation," he said. "We get inputs from a wide range of groups and human rights policies are one input, but I don’t remember GM Uzbekistan at all. … The country doesn’t matter. It’s the quality of the work the company does."

Despite her distance from the ACE process, Clinton praised GM Uzbekistan’s nomination and operations in the country.

"I’d like to congratulate GM Uzbekistan on being named a finalist for the State Department’s 2011 Award for Corporate Excellence," she said during her October 2011 visit. "GM’s presence here in Uzbekistan adds to our efforts to build closer economic connections between ourselves and the countries of South and Central Asia."

Under Secretary Clinton’s leadership, the State Department lifted military sanctions on the authoritarian regime, which has since collected millions of dollars worth of excess equipment from the armed forces, including 300 armored vehicles.

GM owns a 52 percent stake in GM Powertrain Uzbekistan, the Tashkent factory Clinton toured, and has a minority ownership stake in the Asaka plant controlled by state-run UzAvtosanoa. Companies such as GM Uzbekistan are only able to function by fully cooperating with government officials in the former Soviet satellite.

"Even if a company is registered as a ‘non-government’ entity, the government controls them. Foreign investment is not easy," said Shermamat Abdullozoda, a former Uzbek finance ministry employee who fled to the United States to avoid persecution in 2004.

"Almost all U.S. businesses in Uzbekistan operate in partnership with the government, state-owned enterprises, or firms affiliated with the elite," a 2013 State Department report on the business climate in the country found.

The partnership has proved lucrative for GM, which has a near monopoly on the Uzbek car market and produces about 355,000 vehicles each year in the region, according to a GM spokesman. The company was able to attain a 25 percent share in the Asaka plant for a mere $10, and the Uzbekistan government put up $300 million in loan guarantees to build the Tashkent plant. GM Uzbekistan was the largest borrower from the country’s state-owned bank in 2010, according to a World Bank report.

That backing comes with a price.

The Uzbek government confiscated all company vehicles, including those belonging to Americans, to help get-out-the vote for the Karimov regime in 2009, according to 2009 State Department cables published by Wikileaks.

"The [Government of Uzbkeistan] informed GM's American employees that it is requisitioning all GM company cars and drivers for two weeks, starting December 16, for use in the upcoming elections," the cable said.

GM employees have also been spotted at the annual cotton harvest, in which the government forces about 1 million citizens and students to pick the crop for export, often without compensation, according to a report from the Uzbek German Forum for Human Rights.

The Department of Labor has long included Uzbek cotton in its "List of Products Produced by Forced or Indentured Child Labor." 2014 marked the first year that children were not forced into the fields; they were instead replaced with college students and adults, according to Matt Fischer-Daly of the International Labor Rights Forum.

"For the last several years we’ve received reports of GM Uzbekistan sending workers to pick cotton and those orders came from immediate managers and their union representatives. GM is aware of this as far as we know," Fischer-Daly said.

GM said it is working to prevent its employees from being sent into the fields and is hoping to use technology to wean the Uzbek regime from forced labor.

"General Motors and its partners are committed to maintaining the highest level of ethical standards wherever we do business. Accordingly, no workers at any of the GM operations in Uzbekistan are required to participate in the cotton harvest and we are working with our partner to achieve zero participation," GM spokesman George Svigos said in a statement. "In addition GM’s minority-interest JV has supported the mechanization of the cotton industry in Uzbekistan to reduce the demands on manual labor."

Abdullozoda remembers his stint of indentured servitude well. Every September from eighth grade to tenth, he and his classmates piled into buses and worked the fields, hauling 50 kilograms per day.

"They put you up in facilities, but there was no normal living, no toilets, no nothing. You had to bring everything yourself—blankets, mattresses. We were given some water, some potatoes, cabbage, and carrots. You had to find meat yourself. It was terrible," he said. "It’s free money for the dictatorship. Whoever produces the cotton gets almost nothing."

Rough conditions and unsafe work practices from the amateur harvesters contributed to 17 deaths in the 2014 picking season, according to Fischer-Daly. Human rights activists used stories like these in an attempt to derail GM Uzbekistan’s bid for the ACE award, sending letters to the state department. GM failed to earn the award in 2011 and 2012.

"It’s really important for the U.S. government to accelerate pressure on the Uzbek government and not consider this regime a partner that can have completely normalized relations," he said.