081214 Bill Clinton's Donors Include Investor Facing Bribery Probe

(Bloomberg) -- Canadian investor Victor Dahdaleh, facing a U.S. federal probe of allegations that he helped Alcoa Inc. defraud a Bahrain government- controlled metals company, is among donors who gave as much as $5 million to former President Bill Clinton's charitable foundation.

The U.S. Justice Department in March said it was investigating claims in a lawsuit by Aluminum Bahrain BSC, which said Dahdaleh acted as a middleman for bribes that helped Alcoa overcharge the Bahrain company by as much as $975 million for alumina, used in aluminum manufacturing.

Dahdaleh's dispute with Bahrain -- home of the U.S. Navy's Fifth Fleet and an anti-terrorism ally -- shows how entanglements by Bill Clinton's financial backers may pose headaches for Hillary Clinton as the New York senator seeks confirmation as President-elect Barack Obama's secretary of state.

"It certainly creates a couple of extra hurdles for the Obama administration," said Joel Rosenthal, president of New York's Carnegie Council for Ethics in International Affairs.

Dahdaleh, whose Web site shows a photo of himself with Bill Clinton, is in a select group of about three dozen individual donors who gave at least $1 million to the William J. Clinton Foundation, according to contribution records released yesterday. About 40 countries, corporations, foundations and other organizations also topped the million-dollar mark.

Contesting Claims

Calls to Dahdaleh's office seeking comment weren't returned. The businessman, whose privately held Dadco Group owns aluminum and mining companies, said in a statement to Toronto's Globe and Mail earlier this year that he was "saddened and disappointed" by the Bahrain allegations and would be "vigorously contesting them."

The Clinton Foundation released a 2,922-page list of donations in an effort to quiet questions about whether big-money backers, especially foreign governments, may diminish Hillary Clinton's effectiveness as the U.S.'s top diplomat. Saudi Arabia, which gave between $10 million and $25 million, was joined by Norway, Kuwait, Qatar, Oman and Brunei among government givers.

The foundation funded construction of Clinton's presidential library in Little Rock, Arkansas, and backs charitable projects, such as providing affordable drugs for AIDS victims. The foundation has raised more than $500 million from more than 200,000 donors since it was formed in 1997. The group disclosed the size of contributions in general ranges rather than specific amounts. Dahdaleh was listed as giving between $1 million and $5 million.

Bloomberg LP, the parent company of Bloomberg News, gave between $50,000 and $100,000, according to the foundation.

Thousands of Names

The list was dotted with names that may be politically, if not diplomatically, troublesome. William Lerach, a former trial lawyer who pleaded guilty last year to paying clients to file stock-fraud lawsuits, gave between $100,000 and $250,000.

The civil suit against Dahdaleh by Aluminum Bahrain, known as Alba, has been postponed during the Justice Department's criminal probe. Alba, the Middle East's second-biggest aluminum producer, alleged that shell companies controlled by Dahdaleh were used to pay bribes to government or company officials. The lawsuit, in a Pittsburgh federal court, alleged that Alba overpaid New York- based Alcoa by $65 million a year since 1993.

Alcoa spokesman Kevin Lowery said Alba's complaint mischaracterizes the connection among Alcoa and Dahdaleh and others. "We don't agree with most of the claims about associations in the complaint," he said. Lowery declined to comment about what role, if any, Dahdaleh played in dealings with Alba.

'Fully Cooperating'

Alcoa is "fully cooperating" with Justice Department investigators, Lowery said.

Matt McKenna, a Clinton Foundation spokesman, asked about the Dahdaleh inquiry, responded in an e-mail that "We have no comment on any legal issues, none of which have any relationship to, or bearing on, the Clinton Foundation."

Dahdaleh is among sponsors of the Clinton Global Initiative, an annual gathering of world business and government leaders to look for solutions to crises such as global warming, disease, and malnutrition.

Dahdaleh's Dadco Group in 2004 bought Aluminum-Oxide Stade Gmbh, a Stade, Germany-based refinery of alumina, an ore refined from bauxite that is further processed to make aluminum.

His Web site includes an account of Dahdaleh's introduction of Clinton before a December 2005 speech the former president gave in London to the Canada- United Kingdom Chamber of Commerce when Dahdaleh was the group's president.

"To much laughter from the audience, Victor Dahdaleh ended by congratulating President Clinton on his recovery from a quadruple bypass surgery" and gave "an anecdote on the latter's admirable physical fitness," it said.

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