The New York Times reports on a highly lucrative position given to Bill Clinton by billionaire financier Ronald Burkle, the man who claims to have been extorted by a New York Post gossip columnist, Jared Paul Stern. Supposedly Burkle got infuriated by reports that he would be purchasing a modeling agency for the former president to oversee, and the Post columnist required over $200K to keep any other salacious rumors from reaching Page 6. However amusing the proposition of Bill Clinton working in modeling agency may be, the Times uncovers a more problematic relationship between Burkle and Clinton given the likelihood of a Hillary Clinton presidential run:

After leaving the White House in 2001, former President Bill Clinton was inundated with business and job offers, from investment-bank partnerships to seats on corporate boards. He turned them all down, with one exception: He agreed to be an adviser to a family of funds run by the Yucaipa Companies, a California private equity firm controlled by one of his best friends, the billionaire Ronald W. Burkle.

Mr. Clinton's arrangement with Mr. Burkle is an unusual one for a former president, giving him the potential to make tens of millions of dollars without great effort and at virtually no risk, according to Mr. Burkle and advisers to Mr. Clinton. Mr. Clinton's role is to help find investment opportunities for Yucaipa projects, give credibility to the funds and champion their mission of investing in poor areas to corporate executives, union leaders and others. But he has put up little of his own money and has no day-to-day responsibilities over how the more than $1 billion in the funds is invested.

Does this sound fishy to anyone? This billionaire has raised millions of dollars for Bill Clinton in the past, and now does the same for Hillary. In fact, Burkle just held a big Beverly Hills fundraiser for Hillary this past Friday evening. The arrangement between the billionaire and the former president -- and hopeful presidential spouse -- allows Burkle to stuff tens of millions of dollars into the bank accounts of the Clintons in return for no significant work on behalf of the fund itself. All that Burkle requires of Bill Clinton is to stand up and make a few speeches. This sounds ominously similar to Hillary's 10,000% return on her commodities investment while Bill served as governor in Arkansas.

The Times reports that one of the major investor in Burkle's funds is the California Public Employees Retirement System (CalPERS), the retirement fund that often acts as a big dog in political matters. Its board tends to skew Democratic and conducts political battles on behalf of the liberal and leftist agenda. CalPERS jumped into Burkle's Yucaipa funds in a big way in 2002 -- shortly after Bill Clinton came aboard. They now fund almost half of the portfolio that provides Bill Clinton with his enormous salary and light workload.

The Yucaipa funds have provided a solid return, mostly by focusing on risky ventures in underserved areas. Clinton doesn't get paid unless the funds grow past 9% in a year. In 2005, it grew over 50% in one fund and 28% in the other. It appears that many people wish to put their money where the Clintons go, including New York Comptroller Carl McCall, who sank the state pension fund into Yucaipa just after Hillary endorsed his bid for governor over former Clinton aide Andrew Cuomo.

But where does Yucaipa put that money? Front Page Magazine reported in January that some of it went to Al Gore -- what a coincidence! -- for his cable-TV venture. Despite the fact that Yucaipa supposedly exists to provide opportunities for underprivileged and depressed communities worldwide, they saw fit to sink millions into Current Television, which is neither minority owned nor located in an economically-disadvantaged area. It also invested in a Diversified Investment Management Group acquisition of Piccadilly Restauarants, and DIMG is apparently a front for Burkle. It has invested in at least one minority-owned business: Sean John, the clothing firm owned by rapper P. Diddy -- hardly an example of uplifting the disadvantaged.

It appears that the Times has described a archetype for political payoffs and control, with Burkle holding the reins and the Clintons at his beck and call. This is the kind of corruption that First Amendment violations like the BCRA can never touch, and which really present a danger to the electoral process. New York should hold the Clintons responsible for this transparent money-laundering scheme, but likely will shade its eyes and bask in the celebrity of the pair. Americans outside of the Empire State will have to hold Hillary accountable in 2008.

UPDATE: I forgot to mention one of the most recent initiatives by the Yucaipa Funds -- they want to invest in a particular segment of an economically-disadvantaged industry, according to the New York Sun in late March:

A private investment group whose board of directors includes President Clinton made a bid yesterday to take over a dozen daily newspapers owned by Knight Ridder, including the Philadelphia Inquirer.

Mr. Clinton serves as a senior adviser to the Yucaipa Companies, a Los Angeles-based investment firm that has joined with a journalists' union, the Newspaper Guild, to seek control of the 12 newspapers and gradually transfer ownership to the news outlets' employees. ...

"The Yucaipa Companies are putting in a bid today for the 12," a spokeswoman for the union, Candice Johnson, said in an interview. She declined to say how much the union-backed group is offering. "We think the bid will be a very strong bid," she said.

The papers on the auction block include both of Philadelphia's leading newspapers, the Inquirer and the Daily News, as well as the St. Paul Pioneer Press and the San Jose Mercury News. Industry analysts have estimated that the dozen newspapers will fetch between $1.4 billion and $2 billion.

So the Yucaipa Funds, which supposedly exists to invest in poor neighborhoods and minority-owned businesses, wants to allow the Clintons access to twelve major newspapers just in time for the presidential election. I wonder whether my local St. Paul Pioneer Press will endorse Hillary two years from now?

UPDATE II: It's a good thing that Yucaipa performs so well. Its employees have donated hundreds of thousands of dollars to Democratic coffers since 2000, mostly from Burkle. He gave $100,000 to the Democratic Congressional Campaign Committee in August 2001, $100,000 to the Democratic Senate Campaign Committee in December 2001, and another $20,000 to the DCCC in November 2003. He donated a whopping $500,000 to the DNC in November 2002, just at the first Bush midterms. (Terry McAuliffe must have been pleased.) He donated $25,000 to a DNC subsidiary in 2004.

Burkle has spent over $785,000 in the past three election cycles on the Democrats. Interestingly, only $4500 of that got spent in the 2006 cycle. It looks like he has found another method to influence Democratic politics.

UPDATE III: The Burkles spent $4500 so far in this cycle, and only $74,350 in the 2004 cycle. They supported candidates such as John Edwards, Barbara Boxer, Patty Murray, Dianne Feinstein, and Ken Salazar. They spent almost ten times as much in the 2002 cycle, despite it not involving a presidential election; the $500,000 DNC donation covers two thirds of this outlay, but the remainder was three times what Burkle spent after Bill Clinton came aboard Yucaipa.

In 2000, the Burkles contributed over $340,000 to Democrats, including $4,000 to Hillary Clinton's Senate campaign -- $1,000 more than they spent on Al Gore's presidential campaign.

In 1998, the Burkles spent $229,000. All but $1,000 went to Democrats; the single Republican donation went to David Dreier.

1996: $155,000.

So why do the Burkles contribute so much less now than before Bill joined Yucaipa? Maybe because their money can go directly to the source.

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