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8105: Fusion International and Haiti (fwd)

From: Max Blanchet <maxblanchet@worldnet.att.net>

REVIEW & OUTLOOK (Editorial)

 Haitian Connections

 The Wall Street Journal
 Page A22
 (Copyright (c) 2001, Dow Jones & Company, Inc.)

One of the famous foreign policy interventions of the Clinton Presidency was
the controversial decision to return Jean Bertrand Aristide to power in
Haiti in 1994. This newspaper supported Mr. Clinton, arguing that with U.S.
prestige committed and with the restoration of democratic government in the
impoverished island as a goal, the President deserved support.

So it is worth revisiting the status of Haiti today, especially to ask how
it came to pass that in the wake of this intervention, President Clinton's
political associates -- including a former Democratic Party finance chair, a
former White House counselor and Joseph P. Kennedy II -- ended up in
commercial relationships with the Aristide government's monopoly-owned
telephone company.

Since 1994, both as president and later as the power broker behind the
presidency of Rene Preval and the Lavalas Party, Mr. Aristide has ruled
Haiti like a mob don. He has extorted the business community, trampled on
the 1987 constitution and terrorized his political and economic opponents.
Just this past week the Coast Guard sent a ship of 121 Haitian refugees back
to the island. Nearly 700 have tried to escape by sea this year.

Haiti 's November 26 Presidential election, in which less than 5% of
Haitians voted, was a sham. Five international human rights organizations
released a joint statement in January denouncing the election's violent
political climate. Amnesty International called upon the Lavalas Party to
condemn acts of intimidation and violence committed in the party's name. The
European Union voted to withhold aid.

In response, the Clinton Administration in January sent Anthony Lake, a
former Clinton national security adviser, to Port-au-Prince. He came back
with an eight-point agreement in which Mr. Aristide promised better behavior
in the future.

The Lake agreement was one free pass too many for Mr. Aristide's battered
opponents (just this past Monday, a house was shot up where opposition
leaders were meeting, wounding three). They have grown increasingly eager to
tell what they know about Mr. Aristide's business activities -- both now and
in Washington during the 1991-94 exile that followed his overthrow by
General Raul Cedras.

Regarded as Haiti 's legitimate president at that time, U.S. authorities
granted Mr. Aristide access to the country's frozen assets, most notably the
long distance telephone royalties due to Haitian Teleco. According to
Christopher Caldwell, writing in the July 1994 American Spectator, Mr.
Aristide "raised hackles at the Latin America division of AT&T by ordering
the proceeds from Haiti 's international phone traffic moved to a numbered
Panamanian account."

In November 1993, The Wall Street Journal reported that Mr. Aristide was
paying Democratic Party operative Michael Barnes $55,000 a month to lobby
for U.S. action to reinstate him. With the help of U.S. troops, he returned
to Haiti . After regaining Haiti 's presidency, the telephone monopoly
continued to be useful. Because Haiti is one of the top three markets in the
region for long distance calls from the U.S., the monopoly is a cash cow.
Mr. Aristide placed loyal Lavalas followers in charge of it, keeping it
under his control.

According to the Federal Communications Commission, the most recent
officially negotiated settlement rate -- the cost Teleco charges U.S.
carriers for handling a long distance call in Haiti -- is 46 cents a minute.
But digital switching allows the company to charge what it wishes and to
terminate calls in favor of any long distance carrier that it chooses.
Moreover, if long distance carriers use Internet protocols to "bypass"
official lines, the FCC cannot count the traffic. Two different long
distance suppliers shopping the Haitian market have reported to us that
Teleco officials offered them access to the local network at rates well
below the official settlement rate in exchange for payment made to specially
designated accounts.

Based on telecom settlement processes, a company with privileged access to
the network would also receive a high proportion of return traffic from
Haiti , also a big money maker. Says one U.S. telecom expert with knowledge
of Haiti 's system: "The real sweetheart deals are the ones that have a
connection inside Teleco. Those are the deals that make people filthy rich."
A U.S. official specializing in international telecom says, "This is exactly
what we've been seeing in Haiti for years. The money doesn't go anywhere
that leads to a network build-out. Calls get through and someone gets very
rich." Despite high rates justified for the purposes of expanding service,
the number of phone lines serving the country remains paltry; most Haitians
are relegated to the use of "call centers" to make phone calls. Those
centers are now in the hands of Lavalas.

The wide recognition in Haiti that such deals are available has made the
presence of independent U.S. long distance provider Fusion
Telecommunications International a topic of much discussion among the
Haitian business community. Fusion's board of directors reads like a who's
who of Democratic Party heavyweights.

Fusion's CEO is Marvin Rosen, who was the finance chairman of the Democratic
National Committee during the 1996 Clinton fund-raising scandals. Fusion's
board of directors includes Joseph P. Kennedy II, former Mississippi
Governor Raymond Mabus and Bill Clinton's White House chief of staff and
Arkansas confidant Thomas "Mack" McLarty, now with Kissinger McLarty
Associates. Mr. McLarty traveled the region as the White House's Special
Envoy to the Americas. The Fusion board also includes Joseph R. Wright, a
former director of the Office of Management and Budget under President
Reagan. Listed as chairman of the Fusion Advisory Board is former President
Bush's White House Chief of Staff John Sununu. The full listing is available
at www.fusiontel.com/about.html.

Last fall, when we began to inquire about Fusion's long distance service to
Haiti , the company's in-house counsel refused to either confirm or deny
that it even offered service in that market. Numerous follow-up calls since
to her and other members of management were never returned. Mr. McLarty
denied any knowledge altogether about Fusion's involvement in Haiti . Mr.
Kennedy did not return our query.

It was only after our Mary O'Grady independently confirmed Fusion's activity
in Haiti and wrote about it for the Americas column ("Clinton's Haiti Policy
Deserves Prompt Scrutiny," January 26, 2001), that Mr. Kennedy's office gave
us a statement: "Joe has no joint venture, partnership or business
arrangement with the president of Haiti or for that matter, anyone in Haiti
." The statement also says that Mr. Kennedy is not involved in running
Fusion. Mr. Kennedy's denial is interesting given his February 7 op-ed in
the Boston Globe where he wrote on the occasion of Mr. Aristide's
inauguration: "I was proud to help bring more than $1 million in private
investment from Fusion into Haiti ."

We are not suggesting that Fusion's business in Haiti is illegal. And we are
not so naive as to be shocked at the spectacle of prominent political
figures exploiting their former lives as public officials. We are saying
that Fusion's Haiti deal is sleazy. For people connected with the Clinton
Presidency-cum-political machine to attach themselves like pilot fish to the
bleeding ruin of Haiti under Jean Bertrand Aristide, in the wake of an
enormous commitment of American prestige and money on behalf of Haiti 's
people, doesn't survive any conceivable smell test.

It also smells that it is so hard for Fusion's Clintonites to acknowledge
secret business deals with Mr. Aristide, the sole owner and operator of the
Haitian economy, who is in power thanks to a U.S. intervention. And yes, we
do wonder if this is the tip of yet another Clinton iceberg. The Bush
Administration, particularly Colin Powell at State, should be alert to this
phenomenon as it revisits the venues of the Clinton foreign policy legacy.