Wednesday, June 04, 2008

Time for Hillary Clinton to Come Clean About Those Cattle

I hate to be a stick in the mud about this, but something has been sticking in my craw about the talk of Hillary Clinton possibly becoming (if she joins the Obama ticket and if they win) vice-president of the United States. It has to do with cattle.

Not cattle per se, but cattle futures.

Back in 1994, Mrs. Clinton benefited from some mighty suspicious looking trading in cattle futures. Here's a Washington Post article that appeared at the time, luckily still on the web.

I examined those trades for Business Week at the time. The trades stunk then and they stink today. Here's an excerpt from the WaPo story:

Hillary Rodham Clinton was allowed to order 10 cattle futures contracts, normally a $12,000 investment, in her first commodity trade in 1978 although she had only $1,000 in her account at the time, according to trade records the White House released yesterday.

The computerized records of her trades, which the White House obtained from the Chicago Mercantile Exchange, show for the first time how she was able to turn her initial investment into $6,300 overnight. In about 10 months of trading, she made nearly $100,000, relying heavily on advice from her friend James B. Blair, an experienced futures trader.

The new records also raise the possibility that some of her profits -- as much as $40,000 – came from larger trades ordered by someone else and then shifted to her account, Leo Melamed, a former chairman of the Merc who reviewed the records for the White House, said in an interview. He said the discrepancies in Clinton's records also could have been caused by human error.

Why does this stink to high heaven? Not so much because of the trades, but because it shows an extraordinary degree of luck on the part of Mrs. Clinton! Too much luck, if you ask me. Most people lose their shirts in commodities trading. Did somebody use these trades to slip Mrs. Clinton a few bucks? I guess if you were cynical you could say that it looked that way.

No evidence that happened. Just a smell. More from the Post story:

A close examination of her individual trades underscores Blair's pivotal role. It also shows that Robert L. "Red" Bone, who ran the Springdale, Ark., office of Ray E. Friedman and Co. (Refco), allowed Clinton to initiate and maintain many trading positions – besides the first – when she did not have enough money in her account to cover them.
I'm surprised that nobody in the media has dredged this up. (Maybe they forgot about it. I sure did.) By the way, I do mean "dredge." It is old, it is tawdry, and it is petty. Maybe it should be forgotten. One can argue that, perhaps correctly.

But it still stinks to high heaven.

© 2008 Gary Weiss. All rights reserved.

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