Hillary Fattening Campaign War Chest At Secret Sit-Down With Arafat Cronies

Fund-Raising Event at Masri Mansion Closed to Press



WASHINGTON -- The Democratic Senate candidate from New York,
Hillary Rodham Clinton, is raising tens of thousands of dollars
at secret private fund-raisers from cronies of Yasser Arafat,
even as she publicly courts Jewish voters.

Mrs.  Clinton sat for an interview for this week's issue of the
organ of the UJA-Federation of New York, and she's scheduled to
march through the Big Apple in the Israel Day Parade on June 4.
But the Forward has learned that on May 12, Mrs.  Clinton
attended a private fund-raising reception at the Washington
mansion of Hani Masri, a close associate of Mr.  Arafat.  The
event, which sources say raised more than $50,000, was closed to
the press, which wouldn't have known about the event anyway,
since it wasn't listed on Mrs.  Clinton's public schedule.

A week later, on May 19 -- the same day that Mayor Giuliani
dramatically announced his withdrawal from the Senate race --
Mrs.  Clinton quietly slipped into Virginia to attend another
fund-raising event.  This time, sources say, she brought in more
than $70,000 at the home of Rafat "Ray" Mahmood, a
Pakistani-American real-estate developer who was in Islamabad
during President Clinton's visit to Pakistan earlier this year.
Again, the fund-raiser was closed to the press and not listed on
Mrs. Clinton's public schedule.

The news of the events is raising concerns among some Middle East
analysts, Jewish leaders and advocates of campaign-finance
reform.  No one is denying the right of Arab Americans or Muslim
Americans to become involved in reform.  No one is denying the
right of Arab Americans or Muslim Americans to become involved in
the American political process, and no one is alleging any
impropriety.  Questions are being raised, however, about what the
events say about Mrs.  Clinton's political judgment and about the
stance she would take on Middle East issues if elected to the
Senate. Other candidates supported by Mr.  Mahmood or Mr.
Masri, either directly or through political action committees,
include some of Israel's most vocal critics in Congress, those
such as Rep.  Jim Moran, Rep.  David Bonior and Rep.  Tom

"This is part of the problem with Hillary Clinton.  She just
doesn't get it.  She doesn't understand why many of us have this
major problem with her positions.  What can I tell you?  These
are exactly the kinds of things she needs to explain, and they
are almost unexplainable," said Assemblyman Dov Hikind, a
Democrat from Brooklyn. Mrs.  Clinton, under the guidance of
Assembly Speaker Sheldon Silver, has been wooing Mr.  Hikind in
recent weeks, even paying a shiva call in Brooklyn after the
death of Mr.  Hikind's father.  Mr.  Hikind said he would raise
the issue of the secret fund-raisers with Mrs.  Clinton the next
time they spoke.

The president of the Middle East Media Research Institute, Yigal
Carmon, said of Mr. Masri, "I am not sure this is the best ally a
candidate for the U.S.  Senate should choose," especially for
someone running in New York, with its substantial number of
Jewish voters.  Memri has done extensive research on the Masri
family's control of the Palestinian Development Investment Co.
and its ties to Mr.  Arafat.  Padico owns a majority stake in the
stock market in the Palestinian Authority and in the poultry,
mortgage, real-estate and plastic-bottle industries there.

The fact that Mr.  Masri's company, Capital Investment Management
Corp., is awaiting the delivery of a $60 million loan backed by
American taxpayers through the Overseas Private Investment Corp.
also has some government watchdog groups concerned about
appearances.  The loan, for investments in the West Bank, Gaza
and Jordan, was approved in 1997 in a process that involved no
public advertisement or request for proposals. "Unfortunately,
this is par for the course," said the spokesman for Common Cause,
a campaign-finance watchdog group, Jeffrey Cronin.  "The problem
with our current campaign-finance system is that this creates the
appearance that you have to donate or raise large sums of money
to get access and influence with elected officials."

Mr.  Mahmood said he supports Democrats and has no views on
foreign policy other than that he supports peace.  He said he had
been in Pakistan on a family vacation that coincided with Mr.
Clinton's visit.

Mr.  Masri told the Forward that "both Bill and Hillary have done
a great job.  The president has done a great job in his foreign
efforts." He added that the president and Mrs.  Clinton's
leadership give Israelis and Palestinian Arabs "hope to come to a
peaceful settlement."

"For that reason, I'm supporting the first lady," Mr.  Masri

Mr.  Masri said he was asked by Mrs.  Clinton's campaign to host
the fund-raiser and that he complied.  The event drew a few more
than 60 persons, said Mr.  Masri's wife, Cheryl.  Among them was
the legendary fund-raiser for Mr.  Clinton, Terry McAuliffe, a
source said.

Mr.  Masri said he wished he never signed for the OPIC loan,
calling it a hassle. "OPIC looks at every little detail in terms
of how much they are going to make....It's tough to raise money
in the Palestinian territory," he said.  He said there is no
connection between his fund-raising activities and the OPIC loan.

Not all Jewish observers saw a problem with Mrs.  Clinton's
fund-raiser at the Masri home.  "Enough with Hillary-Israel
bashing and Arab-American bashing, Hillary Clinton is great on
Israel," said a Democratic operative and public-affairs
strategist, Steven Rabinowitz.

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