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Home > Business > Business Headline > Report


NRI entrepreneur flays NYT over 'smear campaign'

Aziz Haniffa in Washington, DC | May 28, 2007 12:51 IST

Vinod 'Vin' Gupta, 60, the multi-millionaire chairman and CEO of infoUSA and focus of a major article in the New York Times in the Washington Post on May 26 regarding a lawsuit that brands his using the company's private jet to fly former President Bill Clinton and Senator Hillary Rodham Clinton on personal, business and campaign trips as a 'waste of corporate assets,' has said it's all an effort to embarrass Hillary Clinton's bid for the Democratic presidential nomination.

infoUSA is one of America's leading marketing information companies that provide electronic, print and data processing services to millions of clients.

In an exclusive interview with rediff.com from Singapore where he was travelling on business, Gupta accused the New York Times of "just doing a hatchet job on Hillary and me both because we are friends, and what's worse is that they are not telling the complete truth."

He said that all of this was "part of a smear campaign" because Hillary is the front-runner for the Democratic presidential nomination "and because the New York Times is supporting (Illinois Democratic Senator Barack) Obama and they are trying to hurt Hillary Clinton any way they can."

Vinod GuptaGupta, an alumnus of the Indian Institute of Technology Kharagpur, said, "It's like what you call selective reporting, and even though they know the truth, they will not talk about it, and that's what I call sleazy journalism on their part."

"They have completed decided not to bother with the facts, (and) they have already made up their minds to discredit Hillary and Vin Gupta both," he alleged. "And, they know the facts, and that is the biggest problem with media  --  some of this media  --  where they will distort facts  --  in a self-serving way. No wonder the New York Times is losing subscribers because people don't really trust the New York Times any more."

The Times -- as well as a similar story in the Washington Post and the Associated Press -- citing a lawsuit filed late last year in a Delaware court "by angry shareholders of infoUSA," said Gupta had provided the company jet at a cost of $146,866 to ferry the Clinton's on a family vacation in January 2002 to Acapulco, Mexico and back, and that "during the next four years, infoUSA paid Mr Clinton more than $2 million for consulting services, and spent almost $900,00 to fly him around for his presidential foundation work and to fly Mrs Clinton to campaign events."

According to the lawsuit, brought by two Connecticut-based hedge funds, Dolphin Limited Partnership and Cardinal Capital Management  --  shareholders in infoUSA  --  asserted that Gupta wasted the company's money in order "to ingratiate himself," with his high profile guests, and was part of a pattern of improper company expenditures for things like luxury cars, jets and houses, as well as a yacht "that is notable for being one of the few to have an all-female crew."

The Times said "the disclosure of the trips and the consulting fees is just a small part of a broader complaint about the way Mr Gupta has managed his company. But for the former President, and for the senator who would become president, it offers significant new details about their relationship with an unusually generous benefactor whose business practices have lately come under scrutiny."

It said that "in addition to the shareholder accusations," it (Times) had reported on May 20 "that an investigation by the authorities in Iowa found that infoUSA sold consumer data several years ago to telemarketing criminals who used it to steal money from elderly Americans. It advertised call lists with titles like 'Elderly Opportunity Seekers,' or 'Suffering Seniors,' a compilation of people with cancer or Alzheimer's disease."

The Times acknowledged that "the company called the episodes an aberration and pledged that it would not happen again."

It said that Jay Carson, a spokesman for the former president, had refused to elaborate on what he does for infoUSA, but that he shared the public's concern about misuse of personal information. "It goes without saying that any suggestion that seniors are being preyed upon should be fully investigated and addressed by the appropriate agencies," it quoted Carson as saying.

Meanwhile, according to the newspaper, "Aides to Mrs Clinton were at pains to distance her from infoUSA, pointing out that she had sponsored legislation that would strengthen privacy rights to consumers," and that as for the flights on infoUSA's plane, Phil Singer, Mrs Clinton's spokesman had said the senator "complied with all the relevant ethics rules," on accepting private air travel.

Ethics rules for senators and candidates require only that the recipient of a flight make reimbursement at a rate equal to that of a first-class ticket, which the Times described as "a long-derided loophole that allows special interests to provide de facto gifts of expensive private air travel, which generally costs far more than commercial fares."

Singer had refused to disclose what Mrs Clinton had paid for her flights.

Gupta, who founded infoUSA -- an Omaha, Nebraska company in 1972 (previously known as American Business Information, Inc), has been a Democratic Party stalwart and a major fund-raiser for the Clintons. He is the only Indian American to have slept in the White House's Lincoln bedroom during the Clinton presidency.

Just before his second term ended, Clinton appointed Gupta as a member to the prestigious Board of Trustees of the John F Kennedy Center for the Performing Arts.

Earlier, Clinton had nominated Gupta to be the US Counsel General to Bermuda, and thereafter as the US Ambassador to Fiji, but Gupta declined these offers.

If Gupta had taken up the post of Counsel General to Bermuda or the ambassadorship to Fiji, he would have been the first South Asian American to be appointed a US Ambassador. This honour later went to a Bangladeshi American and also a major Clinton supporter and fundraiser, Osman Siddique, whom Clinton appointed US Ambassador to Fiji after Gupta did not take the job.

In the interview, Gupta said, "We have millions of clients and we have political parties for our clients, we have people who are running for office, their campaigns are our clients, and we do a lot of work for all of them and we have meetings with them, it's strictly a business relationships with them, but they (the New York Times) never did mention that we do a lot of work for political parties."

Gupta said the NYT's article on May 20 "was about this incident, which happened like 3-4 years ago, and then when the Iowa Attorney General asked us for our help in the investigation, we complied completely, and then they thanked us for helping them and cooperating with them and the whole investigation was closed."

"The thing is," he explained, "we have four million customers. Suppose, somebody buys our list and misuses that, we don't know. In this case, which happened four years ago, the client was the client of a company we bought before we bought it. But once we found out this was going on, we quit selling the list and we didn't make any money."

Gupta reiterated, "We cooperated with the Iowa Attorney General completely and they thanked us for helping them in the investigation and like I said, the investigation was closed."

"And, so, I don't know why the New York Times would write about that after three years, and not only that, first of all, they write about it and the next day Obama says we are going to investigate infoUSA. So you know, there's something fishy here."

Gupta alleged, "The Iowa Attorney General, who is supporting Obama, the New York Times is supporting Obama, and then Obama goes on record to say we should investigate infoUSA. To me, it just doesn't smell right."

On May 21, after the New York Times story appeared that infoUSA was among companies that made it possible for thieves to defraud millions of elderly and other Americans, and infoUSA released a statement pledging to examine and change its business practices, Obama singled out infoUSA for scrutiny.

The Times on May 22, quoted Obama's spokesman Ben LaBolt as saying that "Senator Obama has serious concerns that infoUSA perpetuated a fraud on seniors, and he had contacted the appropriate executive agency to ensure that consumer protection laws are being vigorously enforced and seniors are protected from telemarketing schemes."

In criticising the coverage of the company, infoUSA issued a statement saying, "Unfortunately, the New York Times story plays on public anger against these criminals and natural sympathy for their victims to imply that legitimate businesses like infoUSA are culpable. It unfairly tars the reputation of the direct marketing and banking industries by emphasising out of all proportion the sad circumstances of a single victim of someone else's crime."

Gupta said, "We have not perpetuated any illegal activity. We have four million customers. If someone buys a gun and shoots someone, is the gun dealer responsible? No. We ask that our customers follow the law."

Gupta, who told rediff.com that his company this year would earn "close to $650 million in revenue and we have been growing this business," said he would continue to support the Clintons (he is reported to have donated at least $1 million to President Clinton's presidential library in Little Rock, Arkansas, and also over $250,000 to the Clinton Foundation and infoUSA underwrote the lavish millennium New Year's celebration at the White House and on the Mall) but pointed out, "I support Obama also. I gave him money. I've also supported Republican candidates."

"We are businesspeople,"  he said and asserted that paying more than $200,000 to the former President and taking him on as a consultant, "was all strictly business."

"Besides him (former President Clinton), we have used (former US Secretary of State) Colin Powell, (Under Secretary of State and close friend and confidante of President George W Bush) Karen Hughes, (Mississippi Governor and former chairman of the National Republican Committee) Haley Barbour. They have all come to our conferences to speak. We try to balance it both ways," Gupta, who hails from the village of Rampur, near Saharanpur in Uttar Pradesh, said.

He has built two schools in his village, named after former President Clinton and Mrs Clinton, and at his alma mater, several years ago, donated over $2 million to establish the Vinod Gupta School of Management, and a couple of years back donated another $1 million to set up the Rajiv Gandhi School of Intellectual Property Law.







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