How Clinton Donor Got on Sensitive Intelligence Board

What did Fernando want? Advance info for international stock trading? ABC News:

Newly released State Department emails help reveal how a major Clinton Foundation donor was placed on a sensitive government intelligence advisory board even though he had no obvious experience in the field, a decision that appeared to baffle the department’s professional staff.

The emails further reveal how, after inquiries from ABC News, the Clinton staff sought to “protect the name” of the Secretary, “stall” the ABC News reporter and ultimately accept the resignation of the donor just two days later.

Copies of dozens of internal emails were provided to ABC News by the conservative political group Citizens United, which obtained them under the Freedom of Information Act after more the two years of litigation with the government.

A prolific fundraiser for Democratic candidates and contributor to the Clinton Foundation, who later traveled with Bill Clinton on a trip to Africa, Rajiv K. Fernando’s only known qualification for a seat on the International Security Advisory Board (ISAB) was his technological know-how. The Chicago securities trader, who specialized in electronic investing, sat alongside an august collection of nuclear scientists, former cabinet secretaries and members of Congress to advise Hillary Clinton on the use of tactical nuclear weapons and on other crucial arms control issues.

“We had no idea who he was,” one board member told ABC News.

Fernando’s lack of any known background in nuclear security caught the attention of several board members, and when ABC News first contacted the State Department in August 2011 seeking a copy of his resume, the emails show that confusion ensued among the career government officials who work with the advisory panel.

“I have spoken to [State Department official and ISAB Executive Director Richard Hartman] privately, and it appears there is much more to this story that we’re unaware of,” wrote Jamie Mannina, the press aide who fielded the ABC News request. “We must protect the Secretary’s and Under Secretary’s name, as well as the integrity of the Board. I think it’s important to get down to the bottom of this before there’s any response.

“As you can see from the attached, it’s natural to ask how he got onto the board when compared to the rest of the esteemed list of members,” Mannina wrote, referring to an attachment that was not included in the recent document release.

Fernando himself would not answer questions from ABC News in 2011 about what qualified him for a seat on the board or led to his appointment. When ABC News finally caught up with Fernando at the 2012 Democratic convention, he became upset and said he was “not at liberty” to speak about it. Security threatened to have the ABC News reporter arrested.

Fernando’s expertise appeared to be in the arena of high-frequency trading — a form of computer-generated stock trading. At the time of his appointment, he headed a firm, Chopper Trading, that was a leader in that field.

Fernando’s history of campaign giving dated back at least to 2003 and was prolific — and almost exclusively to Democrats. He was an early supporter of Hillary Clinton’s 2008 bid for president, giving maximum contributions to her campaign, and to HillPAC, in 2007 and 2008. He also served as a fundraising bundler for Clinton, gathering more than $100,000 from others for her White House bid. After Barack Obama bested Clinton for the 2008 nomination, Fernando became a major fundraiser for the Obama campaign. Prior to his State Department appointment, Fernando had given between $100,000 and $250,000 to the William J. Clinton Foundation, and another $30,000 to a political advocacy group, WomenCount, that indirectly helped Hillary Clinton retire her lingering 2008 campaign debts by renting her campaign email list.

The appointment qualified Fernando for one of the highest levels of top secret access, the emails show. Among those with whom Fernando served on the International Security Advisory Board was David A. Kay, the former head of the Iraq Survey Group and United Nations Chief Weapons Inspector; Lt. Gen. Brent Scowcroft, a former National Security Advisor to two presidents; two former congressmen; and former Sen. Chuck Robb. William Perry, the former Secretary of Defense, chaired the panel.

“It is certainly a serious, knowledgeable and experienced group of experts,” said Bruce Blair, a Princeton professor whose principal research covers the technical and policy steps on the path toward the verifiable elimination of nuclear weapons. “Much of the focus has been on questions of nuclear stability and the risks of nuclear weapons use by Russia and Pakistan.”

The newly released emails reveal that after ABC News started asking questions in August 2011, a State Department official who worked with the advisory board couldn’t immediately come up with a justification for Fernando serving on the panel. His and other emails make repeated references to “S”; ABC News has been told this is a common way to refer to the Secretary of State.

“The true answer is simply that S staff (Cheryl Mills) added him,” wrote Wade Boese, who was Chief of Staff for the Office of the Under Secretary of State for Arms Control and International Security, in an email to Mannina, the press aide. “Raj was not on the list sent to S; he was added at their insistence.”

Mills, a former deputy White House counsel, was serving as Clinton’s chief of staff at the time, and has been a longtime legal and political advisor.

Four minutes later, Boese wrote to his boss, Richard Hartman, to alert him that Ellen Tauscher, who was then the Undersecretary for State for Arms Control and International Security Affairs, would be meeting with Mills to devise a response to the ABC News request.

“Sorry this has become a headache,” he wrote.

Hartman wrote the next morning to say he would “come up and brief you… about where Raj Fernando stands and the ABC News investigative journalist inquiries. You do need to hear about it.” Separately, in an email to another official, Hartman noted that it was “Cheryl Mills, who added Mr. Fernando’s name to the list of ISAB nominees.”

When ABC News sent a follow-up inquiry about the qualifications of another board appointee, Massachusetts state Rep. Harold P. Naughton, Jr., Boese wrote to Hartman to say the department would have a far easier time explaining Naughton’s credentials. “The case for Rep. Naughton is an easy one. We are on solid ground,” he said.

By this point, Fernando himself had been looped into the discussion. He and Hartman exchanged emails, but the entire text of Fernando’s letter was redacted by the State Department prior to its release.

Twice, Mannina was instructed to stall with ABC News, before Mills sent a public statement. It announced Fernando’s abrupt decision to step down.

“Mr. Fernando chose to resign from the Board earlier this month citing additional time needed to devote to his business,” it reads, noting that membership on the board was required to be “fairly balanced in terms of the points of view represented and the functions to be performed by the advisory committee.”

“As President and CEO of Chopper Trading, Mr. Fernando brought a unique perspective to ISAB. He has years of experience in the private sector in implementing sophisticated risk management tools, information technology and international finance,” the statement says.

The statement was emailed to ABC News two days after Fernando’s resignation and four days after the initial ABC News inquiry.

Fernando’s letter of resignation to Clinton says he “intended to devote a substantial amount of time to the work of ISAB in furtherance of its objectives. However, the unique, unexpected, and excessive volatility in the international markets these last few weeks and months require[d him] to focus [his] energy on the operations of [his] company.”