In the United States, the term “shadow government” refers to the hidden policy-making process where key decisions are made behind the scenes by a plutocracy. To study this process involves naming and investigating the ensemble of powerful institutional and individual actors operating in the private sphere of socio-economic relations, and their relationships to those in formal governmental policy-making positions.

Most prominent among the institutional shadow government actors is the world’s most powerful private organization, Wall Street’s think tank, the Council on Foreign Relations (CFR). It includes top corporations, foundations, law firms, often interacting with America’s leading universities, and individual actors, mainly members of the CFR—an organization that is a combination of the wealthy and the professional with over 3,000 members in 1995, almost 5,000 in 2015—who usually enter the official formal government as “in and outers,” people who build up connections among the powerful, while working for top corporations, then go into government for a few years in top positions, later returning to the corporate world with enhanced power, additional relationships, greater prestige and more access to wealth. The “in and outers” operate throughout government, but usually focus on taking over the foreign policy, financial, national security, law enforcement, and intelligence agencies of the federal government: State, Treasury, Defense, Homeland Security, and Justice Departments as well as the CIA/National Intelligence Agency bureaucracies.

In the U.S., the shadow government represents the capitalist class—made up of extremely wealthy plutocratic families—its hierarchal values and vested interests, not rank and file Americans. Looked at in a narrow fashion, promotion of specific interests and influence peddling by government officials is the result of this process. Viewed from a systemic perspective, the overall interests of the capitalist class as a whole are promoted. The shadow government and its key actors wield power and influence, often in secret and outside the law, without reference to the consent of the governed, and therefore the process is corrupt. It is the opposite of democracy.

Beginnings: Bill Clinton At Georgetown And Oxford

Born into the working class to a single mother, William Jefferson Clinton, an unlikely candidate to found a dynasty, was still able to attend Georgetown University, then Oxford University in England as a Rhodes Scholar, and finally Yale Law School.

In his book, My Life, Clinton mentions that to him, the most “legendary class” at Georgetown, and one that influenced him most profoundly, was conducted by Professor Carroll Quigley, an expert on the Anglo-American ruling classes. Quigley outlined his perspective in detail in two of his books: Tragedy and Hope and the Anglo-American Establishment. He argued that in many nations, especially in Britain and the U.S., the money power—particularly international investment bankers—dominated both business and government. Quigley strengthened and elaborated this view by focusing in depth on the central role of what is usually referred to as the Rhodes-Milner group, whose role in 20th century world history he believed could “hardly be exaggerated.”  Founded by the super-imperialist Cecil Rhodes, the group was organizationally led by the Round Table and the Royal Institute for International Affairs in Britain and by the Council on Foreign Relations in the U.S. It later connected with and became part of a larger network of politically active monopoly capitalists centered around two prominent and interconnected shadow government actors: the Bilderberg Group and the Trilateral Commission. Part of the operations of the Rhodes-Milner group was to fund and indoctrinate politically minded young scholars from the English-speaking world as Rhodes Scholars at Oxford. The majority of these students came from the U.S., the nation that the Rhodes-Milner group believed was most important to influence.

The young Bill Clinton was evidently keen to connect with the shadow government forces represented by the Rhodes Scholars system, and attended Oxford during the 1968-70 years. His roommate was Strobe Talbott III, the scion of old Ohio money who had attended the elite Hotchkiss School and was a third generation graduate of Yale. Within a few years, Talbott would become a CFR member. Bill Clinton was making important connections and decided to attend Yale for his law degree. Yale is where he met Hillary Rodham. The two young lawyers were married in 1975, after moving to Bill’s home state of Arkansas, where he planned on a career in politics.

Influence Peddling And The Arkansas Shadow Government

Like so many jurisdictions in the United States, Arkansas has its own shadow government, plutocratic control by the owners of such giant corporations as Wal-Mart, Tyson Foods, the Stevens investment bank and the Rose Law firm. The Clintons needed their assistance—for income to afford the basics, especially housing, but also for funding Bill’s numerous campaigns for public office. From 1974-1992,  Bill Clinton ran for public office (U.S. Congress, attorney general, governor, president) every other year, a total of no less than ten times during that period. Chelsea was born in 1980, adding to the young family’s funding needs.

Although Bill won eight of his ten campaigns, salaries for Arkansas public officials were low, and the family’s ambitions were very high. Hillary Rodham Clinton filled the void with work as an attorney. From the beginning, the couple worked as a team, using Bill’s positions in high public office to open doors for Hillary, and Hillary’s connections helped fund and facilitate Bill’s many campaigns, partly through speculation and influence peddling. She was invited to join the Rose Law Firm, the “ultimate establishment law firm” in early 1977, just after Bill was elected Attorney General. Rose was the legal arm of the powerful and was well connected to other key shadow government operators. Hillary became Rose’s first woman partner in 1979, just after Bill was elected governor.

At Rose, Hillary soon became the lead attorney for the giant WalMart retail firm. In 1986, when Sam Walton, chief of WalMart, needed a woman on the company’s all male board to fend off criticism from feminists and labor unions (no union was allowed and women made up a majority of WalMart’s low wage employees), he called on Hillary Clinton to join the board as a token female. She served as the lone female on the WalMart board for six years, until 1992, serving with fellow director John Tate, who exemplified WalMart’s vicious anti-union policies. Tate famously called unions “blood sucking parasites,” and WalMart treated them as such. Hillary appreciated WalMart and praised Sam Walton, stating that he “…taught me a great deal about corporate integrity and success.” She remained silent about unions and about WalMart’s low wage-and- benefits policies, even stating at a 1990 stockholders meeting (by 1992 the Clintons reportedly owned $100,000 worth of WalMart stock): “I’m always proud of WalMart and what we do and the way we do it better than anybody else.” The Walton family, the dominant owners of WalMart, now control a fortune of almost $150 billion, an amount equal to the combined wealth of the bottom 42 percent of the entire U.S. population, hundreds of thousands of them part of WalMart’s work-force working for starvation wages.

Hillary Clinton’s quest for money during this period (1978-1979) led her into risky commodity speculation in cattle futures. She bet $1,000, relying on her friend, James Blair, outside counsel for Tyson Foods, for guidance. Blair and his friends evidently knew a lot about speculating in cattle futures and helped Clinton turn her $1,000 wager into $100,000 in only one year. The odds of this kind of success for even a very skilled and knowing trader are near zero, so it is unclear how exactly such a “remarkable” result was achieved. What is clear is that her husband was Governor of Arkansas at the time and in a position to help Tyson. The Rose Law Firm also lobbied state regulators and the state legislature for Tyson. The New York Times reported that Tyson received “favorable decisions on environmental issues,” millions in tax breaks, state loans and placement of company executives on state boards during Bill Clinton’s years in state office. One result of the state’s decisions to favor Tyson was a failure to enforce environmental standards. The consequence was the pollution of some local Arkansas waterways with chicken waste sludge from Tyson’s factories. To cite but one example, the water supply of Green Forest, Arkansas was contaminated with Tyson sludge, resulting in chronic dysentery for many residents, an example of the poisoning of people and ecologies for the benefit of the shadow government representing a minority of very wealthy people, all enabled by the influence peddling of Bill and Hillary Clinton.

Bill, CFR And The Bilderberg Group

Late in his years as governor of Arkansas, and already planning a run for the presidency, Bill Clinton began to cultivate national—and international—political and economic leaders. One was Madeleine Albright, a Democratic party activist and a long-time member of the CFR. Bill asked her to help him become a member of the invitation-only CFR and this was achieved in 1989. Bill also was invited to and attended the Bilderberg Conference in Baden-Baden, Germany in 1991, connecting with an important shadow government actor on the international stage. Clinton’s 1992 presidential campaign relied on Arkansas shadow government players, as well as the contacts he made with wealthy and politically active patrons at the CFR and Wall Street. Warren Stephens, president and CEO of the Stephens investment bank, raised over $100,000 for Clinton. The Worthen National Bank, a Stevens-controlled institution, provided the campaign with a $2 million credit line. In November 1991, Sam Walton wrote a letter to all of his WalMart corporate managers, asking them to support Clinton for president, stating that: “We have a good friend and supporter running for president….” According to the Associated Press and the New York Times, the Clintons flew for free on WalMart corporate jets at least 14 times when organizing for Bill’s 1992 presidential campaign.

Once Bill Clinton was elected president, he selected CFR people for almost all of the top positions in his Administration—individuals who crafted and implemented policies favored by the Council and its wealthy leaders. Fifteen of Clinton’s seventeen top foreign policy officials were CFR members, including: Secretaries of State Warren Christopher and Madeleine Albright; Treasury Secretaries Robert Rubin and Lawrence Summers; both National Security Advisers; all three Defense Secretaries; all three CIA Directors and all three UN Ambassadors. CFR chair Peter Peterson crowed in the organization’s 1993 Annual Report about how successful the 1992-1993 year was: “A Council member was elected president of the United States. Our former vice chair, Warren Christopher, returned to Washington as secretary of state. Dozens of other Council colleagues were called to serve in cabinet and subcabinet positions…”  The resulting policies of the Clinton presidency prominently included promotion of neoliberal capitalism, such as giving free rein for the top banks to increase their speculation by repealing of the Glass-Steagall Act, by passing the Financial Services Modernization Act. Robert Rubin resigned as Treasury Secretary soon after this act was passed, and was hired by Citibank, one of the main beneficiaries of the repeal, for $40 million a year. At the same time, elements of the New Deal welfare state, benefiting the poorest among us, were repealed.

A November 2015 study by the Washington Post found that financial sector (mainly Wall Street) support for his 1992 presidential campaign, many undoubtedly Bill’s fellow CFR members, was $11.17 million, a figure which was more than doubled to $28.37 million in 1996. Clinton’s connections to, and support from, the shadow government, not only gave him the funds to survive campaign setbacks, but it also made him a credible candidate among journalists and media decision-makers, resulting in favorable media coverage. Once in the White House, the Clintons developed elaborate ways to encourage donations from the rich, such as inviting wealthy, shadow government patrons to stay in the Lincoln bedroom at the White House for a fee. This reportedly raised $5.4 million in campaign donations in 1995-1996 alone.

Books, Speeches, Campaigns And The Clinton Foundation Slush Fund

When the Clinton’s left office in early 2001, Hillary Clinton famously declared that they were “dead broke.” According to the New York Times, however, they purchased two houses during this period, one for $1.7 million in Chappaqua, New York in 1999 and another for $2.85 million near Embassy Row in Washington, DC in 2000, hardly something that a “dead broke” couple could afford to do. They then embarked on three giant money- making plans. The first would capitalize on their celebrity status through books about themselves and their experiences and also by giving expensive speeches to those groups— like Wall Street firms and other giant monopoly corporations of the shadow government that directly benefited from Bill Clinton’s years in office—that could pay hundreds of thousands of dollars per speech.  While apparently not violating any statutes, this was nevertheless a form of bribery, since Clinton signed laws that helped the same corporations that turned around and paid large sums for a talk. Tax returns show that the Clintons jointly made over $87 million from these activities during the 2001-2006 period alone, vaulting the family into capitalist class status. Giving speeches to giant corporations for large fees has continued down to the present moment. In 2014 for example, one or another of the Clintons gave a speech for a big fee to Bank of America, UBS, Deutsche Bank, Salesforce, Xerox, Centerview Partners, Citadel LLC, Cisco, Corning, Qualcomm as well as other corporations. By 2015, the website Celebrity Net Worth reported that Bill and Hillary Clinton were worth $125 million.

A second route was running a continuous political operation to raise money for current and future campaigns. A Washington Post report dated November 19, 2015 concluded that the Clintons had raised at least $1 billion for political campaigns. These were the 11 Bill Clinton campaigns and the 4 (so far) Hillary Clinton campaigns (twice each for Senate and for president). The Post concluded that the Clintons had an “unrivaled global network of donors,” led by upper echelon employees and political action committees connected to Wall Street, a perennial shadow government locale, which gave at least $69 million to the Clintons. Hillary Clinton’s top five contributors during her political career have been people connected with four Wall Street banks: Citigroup, Goldman Sachs, JP Morgan Chase and Morgan Stanley and one law firm, DLA Piper. The major bank network of close relationships with the Clintons extends to daughter Chelsea. Her husband, hedge fund speculator Marc Mezvinsky, is a former Goldman-Sachs employee.  Investors in his fund include Lloyd Blankfein, the chair of Goldman.

Billionaire Cristy Walton of Wal-Mart and many wealthy industrial capitalists also support Hillary with sizeable donations. In mid-December 2015, billionaire Warren Buffett, one of the world’s richest individuals, announced his endorsement of Hillary Clinton for president, joining with her at a private fundraiser. He called Clinton a “hero of mine,” stating that he supported her before and would “bet money” on her becoming the next president of the U.S. Buffett controls Berkshire-Hathaway, a major conglomerate with big holdings in corporations like Wal-Mart, Coca-Cola, Kraft-Heinz, Procter & Gamble, Phillips 66, IBM, Wells Fargo, American Express, John Deere, Goldman Sachs, and many others. At least two of the directors of Berkshire-Hathaway, including Warren Buffett’s son, are members of the CFR. The son of this corporation’s vice chair is a major donor of the Republican Party and is backing Carly Fiorina for president. This illustrates the fact that the shadow government has close connections to a number of key candidates in both major parties, assuring that, barring a major upset, whoever wins the presidency will be a win for them.

The third scheme was to set up a foundation whose tax-exempt 501c3 status would allow their wealthy political supporters (including foreign governments who gave large sums to the foundation when Hillary was Secretary of State) to donate millions and get a tax write-off at the taxpayers’ expense. The foundation would do the minimum on charity, the maximum on building its political machine with easy jobs and perks for the Clintons, their friends and supporters, including political staff and those who raised political funds for Clinton campaigns.

The Clinton Foundation has raised about $2 billion according to the November 19, 2015 Washington Post article. An examination of the Clinton Foundation’s 2014 report lists among the donors of $10 million or more: the Gates Foundation; the governments of Saudi Arabia, Australia and Norway; wealthy Canadian mine owner Frank Giustra; billionaires Cheryl and Haim Saban and the Saban Family Foundation; wealthy film producer Stephen Bing; billionaire businesspeople Tom Golisano and Theodore W. Waitt and many others. Prior large donors to the Clinton Foundation during the time Hillary was Secretary of State included 20 foreign governments that relied on weapons export approvals from Clinton’s State Department. These governments, banned by law from giving to U.S. political candidates, likely concluded that one of the best ways to gain access and influence in the American government was to give to the Foundation.

The IRS Code states the all 501c3 organizations are “absolutely prohibited from directly or indirectly participating in, or intervening in any political campaign on behalf of (or in opposition to) any candidate for elective public office.” If this law is being followed, it can be tested by an examination of the Clinton Foundation’s 2014 board of directors and “Leadership Team.” This group consists of a total of 31 individuals, (including Bill, Hillary and Chelsea who were president, secretary and vice chair of the Foundation respectively). A close look at these 31 people discovered that at least 16 of the 31 have been political operatives, staff or major donors for Bill and Hillary Clinton in the past. These include: Bill, Hillary and Chelsea Clinton; Foundation Chair of the Board Bruce Lindsey who was national campaign director of Bill’s 1992 campaign and served in the Clinton White House; Cheryl Mills who was senior adviser and counsel for Hillary’s 2008 presidential campaign; Richard Verma, who served as a “senior member” of Hillary Clintons “team” when she was secretary of state; funders Cheryl Saban and Frank Giustra; Valerie Alexander, former spokesperson for Hillary’s 2008 campaign; Dennis Cheng, former national finance director for Hillary; Amitabh Desai, a former legislative aide for Senator Hillary Clinton; Laura Graham, former deputy chief of staff in Bill Clinton’s Harlem office; Bari Lurie, who worked for HILLPAC and on Hillary’s 2008 campaign; Craig Minassian, who worked on Hillary’s 2008 campaign; and Maura Pally who served as deputy counsel for the 2008 campaign.

The Foundation also hires Clinton political operatives as well-paid “consultants.” One  example is Huma Abedin, hired as a Clinton Foundation “consultant” and who is now vice chair of Hillary’s 2016 campaign. Clearly these individuals are supported with excellent salaries, bonuses and perks by the Clinton Foundation as a reward for past service and to hold them in reserve as a brain trust and pool of skilled labor for future political campaigns. One of them, Dennis Cheng, has already left the Foundation to set up the fundraising operation and become finance director for Hillary Clinton’s 2016 presidential campaign.

Hillary Clinton began making contacts with key shadow government actors at an early date, attending a Bilderberg conference in Atlanta, Georgia in June 1997, for example. She became Secretary of State in early 2009 and served until 2013. Although not a member of the CFR herself, both her husband and daughter are members and she has made speeches at the Council at least ten times in recent years. One of those was an address on the opening of a second CFR headquarters (the original headquarters remains in New York City) in Washington, DC in July, 2009 when she made a statement about how central the Council remains in policy making at the highest level: “…it’s good to have an outpost of the Council right here down the street from the State Department. We get a lot of advice from the Council, so this will mean I won’t have as far to go to be told what we should be doing and how we should think about the future.” Hillary Clinton has numerous other ties to the CFR. One example is Lynn Forester de Rothschild, a prominent Council member who married into one of the world’s richest shadow government families, and honeymooned with her new husband at the Clinton White House in 2000. Rothschild later stated in an interview that she and her “fellow capitalists” would be “very pleased” if she becomes president, adding that “I’m always doing everything I possibly can for Hillary Clinton.” Another example is billionaire hedge fund speculator George Soros, a former director of the Council, who has given large donations to Clinton.  The capitalist class clearly loves Hillary Clinton, as she not only downplays class issues like inequality in her campaigns, but is sure to follow the needs and interests of the capitalist class should she be elected in 2016. Hillary Clinton’s long-standing ties to and support from shadow government patrons strongly cuts against her efforts to cast herself as a champion of what she calls the “middle class.”

During her first run for the presidency, Hillary Clinton surrounded herself with shadow government advisers, especially from the CFR. These included not only her husband, but also long time Council directors Madeleine Albright, Richard Holbrooke and Robert Rubin. CFR staff members like Lee Feinstein and Gene Sperling were also key members of her policy brain trust in 2008. As Secretary of State, many of her top staff, including Deputy Secretary James Steinberg, were CFR members. The exact same pattern holds for her 2016 campaign, where current Council director Alan Blinder and former CFR directors Robert Hormats and Paul Volcker are repeatedly mentioned as key Clinton advisers.

Conclusion

The Clintons, over the past three and a half decades, have taken influence peddling and corruption (the self serving use of public power for private ends) to a new and destructive level by serving the shadow government in a variety of ways. They have provided a convenient cover for wealthy and powerful interests to directly and indirectly influence governmental policies.

Periodic elections in the U.S. are mainly a reassurance ritual to make working class people  believe that they have a say in government. The reality is that democracy is in serious trouble and the ultimate source of this problem is the power of the shadow government and the pro-corporate, pro-capitalist policies it and its favored politicians promote. The struggle for peace, social justice, and a society for all and the good of all requires an organized and popular socio-cultural and political direct-action movement far beyond the money and influence-drenched two party elections that serve the shadow government, yet pass for “democracy” in the United States.

Z

Laurence H. Shoup is the author of Wall Street’s Think Tank: the Council on Foreign Relations and the Empire of Neoliberal Geopolitics 1976-2014 (Monthly Review Press, 2015).