Monday, July 21, 2008

President Bush lobbyist Stephen Payne in ‘bribes’ row quits

President Bush lobbyist Stephen Payne in 'bribes' row quits

Cash for access at the White House is under scrutiny by Congress

An American government adviser and lobbyist, caught offering access to top White House figures in exchange for a $250,000 (£126,000) donation towards President George W Bush's private library, has resigned following the launch of a congressional inquiry into the scandal.

Stephen Payne, who has close links to the White House, had to relinquish his seat on the advisory council to the Department of Homeland Security following an exposé in The Sunday Times last weekend.

It has also since emerged that Payne had made misleading statements about his business dealings relating to another aspect of the "cash for access" scandal in which a $2m payment was allegedly made by a foreign government to secure a visit from Dick Cheney, the US vice-president.

Payne, a top fundraiser for Bush who has accompanied the president and vice-president on foreign trips, was covertly filmed by The Sunday Times offering to arrange meetings with Cheney, Condoleezza Rice, the secretary of state, and other senior officials for a former dignitary from central Asia who wanted to relaunch himself politically.

Payne said the foreign politician should make a $250,000 payment to the Bush library, plus another $450,000 for his lobbying firm.

The story has made waves in Washington where the issue of presidential libraries, which departing heads of state typically set up to enshrine their political legacies, has long been controversial. Unlike political campaigns, presidential libraries are legally allowed to accept anonymous donations, leading to fears that favours may be given in return.

Henry Waxman, chairman of the House of Representatives oversight and government reform committee, last week announced an inquiry into Payne's actions.

The foundation which raises funds for the Bush library declared that it will not be accepting foreign donations while the president is still in office.

Waxman said the report "raises serious concerns about the ways in which foreign interests might be secretly influencing our government through large donations to the library".

The Sunday Times has sent the congressional inquiry a dossier of its evidence.

There are increasing suspicions, however, that Payne may have acted as a conduit in the past for funds passed to elements connected to the Bush administration in return for access to its senior figures.

In 2005 Payne, who is president of the US lobby firm Worldwide Strategic Partners (WSP), was said to have agreed a $2m deal with the Kazakh government to arrange a visit by Cheney to the central Asian country.

Nursultan Nazarbayev, the Kazakh president, wanted Cheney's trip to be seen as an endorsement of his regime, which is widely considered to be repressive.

The visit, which took place in May 2006, caused surprise internationally for the lavish praise which Cheney heaped upon Nazarbayev.

Yerzhan Dosmukhamedov, who in 2005 was an adviser to Timur Kulibayev, a billionaire and son-in-law of Nazarbayev, was involved in the negotiations with Payne.

Dosmukhamedov, who has since founded an opposition party and gone into exile, said his negotiations, carried out at the behest of the Kazakh government, specified that Cheney would visit Kazakhstan.

He understood that the money was paid to Payne's company via KazMunayGas (KMG), the Kazakh state-owned oil and gas company, on the understanding that some of it would be passed to people connected to the Bush administration.

Last week Payne, who has visited Kazakhstan several times including accompanying Cheney on his trip there, said no payment had occurred and that he had never closed a deal with KMG.

"Neither I, , nor any other entity that I am associated with have ever worked for any entity in Kazakhstan," he said in a statement.

The Sunday Times, however, has discovered the existence of a channel through which funds from the Kazakh government could have been readily transferred.

A sister company to WSP, Worldwide Strategic Energy (WSE), of which Payne is also president, has a subsidiary, Caspian Alliance, which is the sole US representative for KMG.

The disclosure is contained within a draft of a 44-page WSE "placement memorandum" brochure circulated to potential energy investors last year. It adds that the Caspian Alliance was "providing KazMunayGas with political risk analysis as well as access to energy leaders and executives".

The document shows a photograph of Payne, wearing traditional Kazakh dress, standing next to Kulibayev, who was vice-president of KMG until October 2005, when he became the chairman of KazEnergy, the country's oil and gas umbrella organisation.

When contacted by The Sunday Times, staff at the Caspian Alliance, which is based in Azerbaijan, confirmed that it is a subsidiary of WSE and represents KMG in America.

In a further link, Randy Scheunemann, chief foreign policy and national security adviser to John McCain, the Republican presidential candidate, was listed in the WSE brochure as part of its executive team. Scheunemann and Associates, his lobbying firm, is reported as having represented the Caspian Alliance in 2005.

At the undercover meeting last week, Payne said Scheunemann had been "working with me on my payroll for five of the last eight years". When confronted over the link to KMG, Payne declined to comment.

Since the publication of the exposé last weekend, the White House has distanced itself from Payne and denied that any donations to the Bush library would influence policy.

In the undercover video, shot in a London hotel earlier this month, Payne says a donation to the Bush library would be "a show of we're interested, we're your friends" and that the donor was "serious" about arranging meetings with senior administration figures.

In the wake of last week's article, Payne said his repeated references to a donation to the Bush library had been "taken out of context". In fact, as the evidence sent by The Sunday Times to the congressional inquiry makes clear, Payne made the suggestion in the meeting unprompted.

After the article the Department of Homeland Security made him resign from its advisory committee. "He was asked to resign. He did resign," it said.

Payne said he stepped down because he could not devote the necessary attention to the post, given the controversy .

Payne is also facing questions over why his lobbying work for various foreign political interests was never registered with the justice department, as required by American law. Under the foreign agents registration act, failure to register as an agent for a foreign political party or person is punishable by a fine or prison.

Additional reporting: Anna Mikhailova

CHENEY FLIP-FLOP

Dick Cheney, the US vice-president, was said to be unconcerned about Kazakhstan's chequered human rights record when he visited the country.

During a meeting earlier this month Stephen Payne, a lobbyist, told an undercover Sunday Times reporter about Cheney's 2006 visit, which he helped organise. Payne said that before Cheney arrived he had primed Karim Massimov, then the deputy prime minister and now prime minister.

Payne said: "I took him aside a couple of days early and told him that Cheney was going to say some very unusual things to him and he was surprised. Very surprised. And then I met with him after Cheney left . . . he was surprised how open Cheney was and how Cheney was more interested in what Kazakhstan could do internationally and what it could do on energy and those kind of things, more so than making them toe the line on human rights."

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