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HUD Abandons A Tainted Loan Program

Program would have benefited two Democratic fund-raisers, WSJ report says


WASHINGTON (AllPolitics, Feb. 21) -- The Department of Housing and Urban Development has canceled a loan program that would have helped two Boston business executives who raised money for Bill Clinton and the Democratic Party, The Wall Street Journal reported today.

HUD Secretary Andrew Cuomo reportedly canceled the AHELP energy efficiency loan program, after a Journal report that the two businessmen, Fred Seigel and Alan Leventhal, attended a White House coffee with Clinton at the same time they were negotiating with HUD over their role in the loan program.

A HUD official said the agency wants to avoid any perception of a conflict of interest in how Siegel's firm, Energy Capital Partners of Boston, was selected as a lender for the program.


Siegel and Leventhal deny asking Clinton for any help, and former Housing Secretary Henry Cisneros denied that any pressure was applied to reach an agreement with Siegel's company, the newspaper reported.

The original plan was for Capital Energy to originate loans to housing developers, with the money earmarked to make the housing more energy efficient. Capital Energy and Siegel were mentioned by name last fall as an approved lender for the program in a federal notice, and that attracted some scrutiny within HUD.

Siegel declined comment, but a spokeswoman said the firm already has invested $1 million in the program, and would assume all lender risks.

Meanwhile, the White House also has run into questions about its relationship with another big Democratic contributor, Miami computer executive Mark Jimenez.

According to the Journal, Jimenez met twice with National Security Council officials at the White House to warn of impending coup in Paraguay, where he sells computer parts.

Jimenez asked the White House to back Paraguay's president, Juan Carlos Wasmosy. Clinton did wind up backing Wasmosy, calling him and permitting him to stay in the U.S. Embassy for a time.

The day the unsuccessful coup attempt began, Jimenez donated $100,000 to the Democratic National Committee.

Administration officials say Jimenez's visits had no bearing on Clinton's decision to support Wasmosy, though he told the Journal: "I saved democracy in Paraguay."

In another development, the New York Post reported that the head of China's state-run petrochemical company was able to arrange a private meeting with Energy Secretary Hazel O'Leary through a Democratic Party donor described by White House aides as a "hustler."

According to the Post, Chinese executive Sheng Huaren, who wanted to expand the company's business in the U.S., had a 15-minute meeting with O'Leary in October 1995. Records showed that consultant Johnny Chung, who reportedly gave $366,000 to the Democratic National Committee (DNC), arranged the meeting through the DNC.

Memoranda released last week by the White House portray Chung as a "hustler." Officials were urged to beware of Chung's attempts to gain access to Clinton and the first lady.

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