Clintons Facilitated Donor’s Haiti Project That Defrauded U.S. Out of Millions

Hillary Clinton Donor Claudio Osorio’s InnoVida bilked investors out of $40 million

Claudio Osorio and Bill Clinton (screenshot of CNBC program American Greed)
July 17, 2015

A federal agency rushed to approve funding for a Clinton donor’s sham Haiti recovery project that ended up defrauding the U.S. government out of millions, according to court transcripts and internal government documents obtained by the Washington Free Beacon.

Miami businessman Claudio Osorio, who is currently serving 12 years in federal prison on fraud charges, leveraged his relationship with Bill and Hillary Clinton to help his company InnoVida obtain a $10 million loan from the Overseas Private Investment Corporation (OPIC) for a Haiti housing project in 2010.

OPIC is an independent government agency that submits its annual budget requests through the State Department and works closely with the agency.

Bill Clinton helped arrange for a high-powered Florida law firm to represent Osorio during loan negotiations with OPIC, according to court testimony. An internal OPIC memo said Hillary Clinton was prepared to marshal State Department resources to assist with the donor’s project.

InnoVida was supposed to use the funding to build houses in Haiti after the earthquake, but it defaulted on the loan and the homes were never built.

After InnoVida went bankrupt in 2011, a court-appointed investigator said it appeared that over $30 million of its funds had been diverted to foreign bank accounts and were not retrievable.

Osorio was later accused of using the company to run a Ponzi-like scheme, bilking government and private investors out of a collective $40 million and using their money to fund his lavish lifestyle—making payments on his Miami Beach mansion, buying a Maserati and maintaining his Colorado ski chalet.

He pleaded guilty to wire fraud and money laundering in 2013.

Much of the media coverage of InnoVida has focused on Jeb Bush’s involvement as a consultant and board member. But previously unreported government documents and testimony from the 2013 fraud trial of InnoVida’s chief financial officer reveal that Osorio’s relationship with the Clintons played a central role in InnoVida’s efforts to obtain OPIC funding for the house-building scam.

The OPIC official who helped approve the InnoVida loan wrote in a 2010 internal memo that "secretary of state, Hillary Clinton, has made available State Department resources to assist with logistical arrangements" for the project and "Former president Bill Clinton is personally in contact with the company [InnoVida] to organize its logistical and support needs."

The memo added that the Clinton Global Initiative had agreed to purchase "6500 homes in Haiti from InnoVida within the next year."

During the loan process, Osorio repeatedly emphasized his connections to the Clintons during conversations with OPIC officials, boasting about taking a trip to Haiti with the former president after the earthquake and telling an OPIC manager that he had a direct line to Hillary Clinton.

He also brought members of the Clintons’ inner circle on board with the project. InnoVida brought on Jonathan Mantz, Hillary Clinton’s 2008 finance director and currently the senior financial adviser at the Clinton-supporting Priorities USA PAC, to lobby OPIC for the loan. The company’s board included Chris Korge, a top Clinton moneyman who has raised millions for them, and close ally Gen. Wesley Clark.

InnoVida also retained top Florida law firm Shutts & Bowen to help negotiate the loan agreement with OPIC.

An attorney at Shutts & Bowen testified that Bill Clinton asked the firm to represent InnoVida in the negotiations. One of the Clintons’ top bundlers, Alexander Heckler, was a partner at the law group.

A spokesperson for Hillary Clinton did not respond to request for comment.

OPIC officials denied in court testimony that they approved the loan under political pressure. They also said they never tried to verify Osorio’s claims that the Clintons were assisting him with the Haiti project, even after OPIC used this information to justify the loan approval and began dispensing millions of dollars to his company.

InnoVida’s loan request was approved by OPIC after just two weeks. The process typically takes months or years, agency officials testified. The loan was also approved before InnoVida had turned over its financial statements.

In a rare move, OPIC waived a requirement that the company provide an independently audited financial report up-front, even though Osorio had previously run a company that was sued for manipulating its stock prices.

The National Legal and Policy Center, a government watchdog group that has spent months investigating the documents related to this case, told the Free Beacon that it was "a textbook example of a corrupt pay-to-play scheme" and called for an investigation of OPIC.

"This case represents a new low in the misuse of public funds by Clinton allies," said NLPC chairman Ken Boehm. "There must be an investigation into why this Clinton donor was using a law firm recommended by Bill Clinton and one of Hillary Clinton's top fund raisers to improperly obtain millions from the Overseas Private Investment Corporation."

A spokesperson for OPIC did not respond to request for comment.

Osorio’s relationship with the Clintons dates back to at least 2007. That fall, Osorio hosted a fundraiser for Hillary Clinton’s presidential campaign at his Star Island mansion in Miami Beach. Bill Clinton gave a speech at the event and "explain[ed] to an audience that Osorio planned to build 10,000 houses at $5,000 apiece for impoverished Haitians," according to an NPR report.

Osorio contributed between $10,000 and $25,000 to the Clinton Foundation in 2009. His company InnoVida followed up with another $10,000 to $25,000 donation. The foundation returned the money in 2013, after a court-appointed receiver sued to recover funds for swindled investors.

InnoVida approached OPIC in late 2009 through its lobbyist Mantz, according to an OPIC email. Initially the company said it wanted the loan to build a panel manufacturing facility in Haiti. OPIC reportedly expressed interest in the idea, but InnoVida allegedly neglected to pay a $20,000 retainer and dropped out of contact that December.

On Jan. 13, 2010, the day after the earthquake in Haiti, Osorio reached out again to OPIC’s renewable energy director Lynn Tabernacki, this time with a proposal to build houses on the island.

After that discussion, Tabernacki said her team rushed to approve the project, working "day and night and weekends to make sure that we followed all of our credit policies and procedures to get it done as quickly as possible."

Tabernacki helped InnoVida’s chief finance officer write the loan application, telling him in a Jan. 19 email to "[p]lease let me know when you've finished so that I can immediately send it to our policy group."

Two days later, Tabernacki and another OPIC official flew to Miami to visit the InnoVida offices. During the meeting, Osorio reiterated to Tabernacki he was in close contact with Bill Clinton and that he had Hillary Clinton’s "ear" at the State Department.

Five days later, on Jan. 26, Tabernacki sent a memo to her supervisors at OPIC requesting approval for the InnoVida loan.

She wrote that InnoVida was "well placed to support the recovery efforts in Haiti," noting its relationship with the Clinton Global Initiative and "U.S. persons of political influence that are able to assist in advancing the company's plans."

"Former president Bill Clinton is personally in contact with the company to organize its logistical and support needs," added Tabernacki. "[InnoVida board member] Wesley Clark is arranging for military transport of the initial structural panels. Steven Green (former CEO of Samsonite Corporation and former ambassador to Singapore) will provide barge space on ocean vessels, when necessary, to ship the factory components. And secretary of state, Hillary Clinton, has made available State Department resources to assist with logistical arrangements."

Tabernacki later testified that this memo was based on claims from Osorio, and she did not take any steps to corroborate the information. However, she said the part about Hillary Clinton was accurate.

"The Hillary Clinton aspect was true, because at that point, we had—not myself, but there were others within OPIC that had been making arrangements with the State Department for the activities that were going on the ground [in Haiti]," said Tabernacki.

InnoVida was the only company to receive an OPIC loan for a Haiti-related project in 2010, according to the agency’s annual report.

Senior OPIC officials green-lighted the InnoVida loan the same day Tabernacki sent the approval request. At the time, the company had yet to turn over any financial statements. Lawyers for OPIC and InnoVida had still not negotiated certain contractual terms.

While OPIC typically requires companies to turn over audited financial information before receiving a loan, it granted InnoVida a six-month extension. The company turned over an unaudited financial statement—reportedly based on questionable numbers—on January 28, two days after the loan was approved.

Tabernacki testified that the agency expedited the approval process because it was trying to expand relief efforts in Haiti after the earthquake.

The defense attorney who cross-examined Tabernacki was not available to comment because he died shortly after the case ended. His client, InnoVida’s CFO Craig Toll, was sentenced to four years in prison for his role in the company.

The NLPC said an investigation into OPIC is necessary.

"When a criminal like Osorio steals money meant for earthquake victims, the public is entitled to answers," said Boehm.