Friends in High Places

Clinton Foundation funded companies benefitting major donor’s construction project

Bill Clinton, Frank Giustra
Frank Giustra and Bill Clinton / AP
December 7, 2015

When Pacific Infrastructure, a company connected to Clinton Foundation mega-donor Frank Giustra, needed $150 million to build a port and pipeline along the northern Colombian coast, it went to the International Finance Corporation for funding.

There was one major obstacle. The project, according to a review by the International Finance Corporation, was deemed "Category A." That meant it would likely have "significant adverse social and/or environmental impacts that are diverse, irreversible, or unprecedented" on the local community.

As a condition of the investment, Pacific Infrastructure agreed to fund social programs to alleviate some of the damage. It said that it would launch job-training centers for Afro-Colombians and indigenous peoples in Cartagena, where the local economy would be negatively affected by the project. The company also said it would support the local fishing and farming industries.

Within the next few months, two for-profit companies were created in Cartagena. One was a job-training center to teach locals how to work at the port. The other was a food supplier that helped support fishers and farmers by selling their products to hotels and supermarkets.

Bill Clinton and Frank Giustra launched both companies using funding from the Clinton Foundation’s Colombia-based private investment fund, Fondo Acceso.

The case suggests that the Clinton Foundation’s charitable work has sometimes dovetailed with the business interests of its top donors.

Giustra, a Canadian mining tycoon, has committed over $100 million to the Clinton Foundation since 2005. Pacific Rubiales—an oil company founded by Giustra that also owned a 49 percent stake in the Cartagena port project—has pledged millions to the Clinton Foundation as well.

By the end of 2013, the International Finance Corporation agreed to invest $150 million in the port construction, despite reservations about the environmental and social effects. The IFC’s U.S. funding is linked to State Department appropriations.

Ethics watchdogs questioned the timing of the projects, noting that they appeared to benefit the donors’ financial interests. Giustra, a close friend of Clinton’s since 2005, co-owned Blue Pacific, which was a primary investor in the Pacific Infrastructure port project at the time.

Ken Boehm, director of the National Legal and Policy Center, said it appeared that "Guistra's financial interests addressed the serious questions about his project's significant adverse effects by promising benefits through companies funded by the Clinton Foundation's secretive Colombian so-called private investment fund."

"This looks a lot more like a sweetheart deal for Guistra rather than anything resembling a legitimate charity," said Boehm.

The Pacific Infrastructure port and pipeline project had its share of critics. The U.S. government, the largest shareholder in the International Finance Corporation, abstained from voting on the investment in 2013 due to environmental and social concerns.

"[T]here still appears to be a significant amount of uncertainty around the environmental and social risks involved with the pipeline and the work needed to properly address those risks," said the U.S. Treasury Department in a May 8, 2013, statement.

The port project would directly impact five indigenous or Afro-Colombian communities, according to the assessment, including the livelihoods of local fishers and farmers.

In order to build the pipeline, Pacific Infrastructure also said it would have to take over property owned by locals—potentially by force, if the owners were unwilling to sell.

The International Finance Corporation published the Pacific Infrastructure proposal for board comment on Jan. 13, 2013. The next day, a temporary employment agency in Colombia called Gente Estrategica received a grant from the U.S. Agency for International Development to fund a job-training program for ethnic minorities.

That spring, the Clinton Foundation and Gente Estrategica opened up a joint job-training program for indigenous peoples and Afro-Colombians in Cartagena, with support from USAID.

The "Acceso Training Center at Gente Estrategica" was co-sponsored by Giustra, and funded by the Clinton Foundation’s equity fund, Fondo Acceso. A Clinton Foundation official said it trained workers to operate the Pacific Infrastructure port.

"[T]he Training Center offers training in different trades related to ports operation, which has helped hundreds of employees and potential employees of the Port Society Puerto Bahía (owned by Pacific Infrastructure)," said the Clinton Foundation official, who asked not to be named.

Pacific Rubiales, an oil company founded by Giustra that he says he no longer owns shares in, provided some of the funding for the training center. The Acceso Training Center also partnered with the Puerto Bahia Foundation, a non-profit group run by Pacific Infrastructure.

"USAID, in partnership with the Acceso Training Center and the [Colombia] Ministry of Labor, aims to implement a training program [for the] population of African descent and indigent victims of armed conflict in Cartagena," said the Acceso Training Center website.

By the end of 2013, Gente Estrategica had received nearly $2 million from USAID for its job-training program.

The Clinton Foundation said the USAID grant was given to Gente Estrategica through an intermediary group and did not go directly through the Clinton Foundation.

"A community organization that partners with the training center received funding in 2013 from USAID through ACDI VOCA, as part of the project’s efforts to provide vocational training to students in Colombia," said the Clinton Foundation official.

USAID declined to comment and said it would only answer questions about the grant through a Freedom of Information Act request.

The agency, whose budget is controlled by the State Department, also declined to answer questions about Gente Estrategica’s labor rights record.

Gente Estrategica is a subcontracting company that supplies employees to corporate clients on a contractual basis. The U.S. government and human rights activists have criticized the subcontracting industry in Colombia, saying the indirect hiring system leaves workers with few rights or protections.

Gente Estrategica supplied workers for another company in Giustra’s orbit, Pacific Coal, in 2012. The employees went on strike for over 20 days, protesting what they referred to as excessive working hours and low pay. Pacific Coal called in Colombian authorities to break up the picket line, and Gente Estrategica reportedly fired the protesting workers, claiming that the strike was illegal.

Gente Estrategica did not respond to request for comment.

Acceso Oferta, the company launched by Clinton and Giustra to support the local fishing and farming industries, says that one of its main goals is "profitability for partners"—the food and hospitality companies that buy its products. Its website also says its vision is to "be the leading company in the Colombian Caribbean Coast that contributes to sustainable growth in families and small businesses."

According to the Acceso Oferta website, the for-profit produce supplier was funded by Fondo Acceso, a private investment firm owned by the Clinton Foundation, and the Clinton Giustra Enterprise Partnership. The foundation and the partnership have both declined to provide a full list of companies the firm has invested in.

According to the Clinton Foundation’s tax filings, the foundation owned 99 percent of Acceso Oferta in 2014. It also posted a negative income for the company that year of $188,000.

Pacific Infrastructure did not return request for comment. An attorney for Giustra did not return requests for comment.

Published under: Clinton Foundation