EXCERPT How a Billionaire Friend of Bill Helps Him Do Good, and Well
NY TIMES, Published: April 23, 2006 By JOHN M. BRODER and PATRICK HEALY
After leaving the White House in 2001, former President Bill Clinton was inundated with business and job offers, from investment-bank partnerships to seats on corporate boards. He turned them all down, with one exception: He agreed to be an adviser to a family of funds run by the Yucaipa Companies, a California private equity firm controlled by one of his best friends, the billionaire Ronald W. Burkle.
Mr. Clinton's arrangement with Mr. Burkle is an unusual one for a former president, giving him the potential to make tens of millions of dollars without great effort and at virtually no risk, according to Mr. Burkle and advisers to Mr. Clinton.
Mr. Clinton's role is to help find investment opportunities for Yucaipa projects, give credibility to the funds and champion their mission of investing in poor areas to corporate executives, union leaders and others. But he has put up little of his own money and has no day-to-day responsibilities over how the more than $1 billion in the funds is invested.
Mr. Clinton, 59, spends most of his time on philanthropic ventures, like fighting AIDS in Africa and poverty around the world, and minimal time on Yucaipa, his advisers say.
Mr. Burkle, 53, who made his fortune operating supermarkets, said that the time Mr. Clinton does spend on the funds is invaluable because of the incomparable access and political star power he provides.
Mr. Burkle, a major Democratic donor who is now a fund-raising force for Senator Hillary Rodham Clinton. He served as host for a fund-raiser for Mrs. Clinton at his Beverly Hills estate.........
The three Yucaipa funds that Mr. Clinton advises total more than $1 billion, according to interviews and public records. Mr. Burkle would not disclose the precise amounts, citing competitive concerns, but Yucaipa manages in excess of $3 billion, of which these three funds are a subset. The funds are intended to inject investment capital into poor urban and rural areas in the United States and abroad that traditional equity funds and banks are reluctant to serve, Mr. Burkle said.
The funds Mr. Clinton advises invest in grocery stores, retail developments, manufacturing and distribution, and minority-owned businesses. Yucaipa has found significant growth opportunities in such areas because of the low cost of land and the relative lack of competition.
Under terms described by Clinton advisers and Mr. Burkle, Mr. Clinton will receive a share of Mr. Burkle's profits on two domestic funds should their returns exceed 9 percent over the life of the funds. One fund had reported a gain of 51.3 percent and the other 25.8 percent in 2005, according to reports to investors.
Mr. Clinton is also a partner in a Yucaipa fund that invests in overseas ventures, for which he receives regular payments and would draw one-third of the profits when the fund is dissolved at least five years from now.
Mr. Burkle contributed millions of dollars to Mr. Clinton's campaigns and to the Democratic Party and has been a significant benefactor of the Clinton Library in Little Rock, Ark. He also helped pay part of the more than $11 million in legal bills Mr. Clinton accrued during the Whitewater and Monica Lewinsky investigations. Mr. Burkle was among the dozens of Democratic donors rewarded with a stay in the Lincoln Bedroom in the White House.
SOUORCE http://www.nytimes.com/2006/04/23/nyregion/23burkle.html?pagewanted=1&ei=5090&en=8072d510a5b4ab09&ex= 1303444800&partner=rssuserland&emc=rss
“Yucaipa has found significant growth opportunities in such areas because of the low cost of land and the relative lack of competition.”
And HUGE tax deferrments, no doubt : )
Perhaps this is why Bill destroyed Stan Lee Media and stiffed Peter Paul. He had a better deal from Burkle.
Don’t know if this has any relationship to Hsu, but Richard Riordan (former mayor of Los Angeles and a moderate or liberal Republican?) recntly rushed to disassociate himself from an investment gone bad with Ron Burkle.
Burkle-Riordan accord reported over investment
The former mayor of L.A. had sued over an investment with the billionaire businessman.
By Carla Hall, Los Angeles Times Staff Writer
September 8, 2007
A legal battle between former Los Angeles Mayor Richard Riordan and billionaire businessman Ron Burkle over an investment has ended before Burkle was even served with court papers, according to Burkle’s spokesman.
In a lawsuit filed Thursday in Los Angeles Superior Court, Riordan alleged that Burkle not only refused to let the former mayor — and once close friend — out of the deal, but changed investment strategy without letting the investors know.
The lawsuit, which sought unspecified damages, stems from a 1999 investment of $5 million that Riordan made with Burkle, who acquired his fortune mostly by buying and selling supermarket chains and who founded a powerful private equity firm with stakes in various industries
When Burkle, 54, found out about the Riordan suit, he dispatched a letter to the former mayor saying he was “shocked and surprised” and offering a buyout.
“It’s been resolved,” said Burkle spokesman Frank Quintero. “They had a very cordial, pleasant conversation last night.”
In that phone call, according to Quintero, the two men agreed that Riordan, 77, would donate the money to the Puente Learning Center and LA’s Best, an after-school program.
It’s unclear exactly how much will be recouped from Riordan’s $5-million investment. “It’s not a material amount of money, but I would be remiss if I did not advise you that this is a bad time to sell,” Burkle said in the letter.
... According to the lawsuit, Riordan was eager to get into high-tech ventures when he invested with one of Burkle’s “partnership-style investment vehicles” — the various entities that constitute Burkle’s Yucaipa Cos. — which in turn invested in Alliance Entertainment Co.
...Riordan said in his suit that he was told he would have an opportunity to cash out. In 2005, Alliance became part of the publicly traded Source Interlink and since then, the suit stated, “Source Interlink’s stock has steadily declined from nearly $14/share to about $4/share, today.”
Yucaipa Cos. owns about a third of Source Interlink, making it the largest shareholder. Source Interlink paid $1.2 billion in May for a specialty magazine unit, causing some analysts to publicly question whether Source Interlink had paid too much.
Riordan said in his suit “that Mr. Burkle has forestalled realizing losses in these companies whenever possible, in order to continue to falsely perpetuate the myth of his being a billionaire, ‘legendary investor’ with superior rates of return.”
Riordan’s investment is part of the partnership’s investment.
Burkle wrote to Riordan, “It has always been my principle that partners go into an investment together and get out together. Having said that, and because I know you’ve had a rough year with many challenges, I am willing to take you up on the offer you made . . . that we buy your partnership interest.”
A Burkle ping.