Ron Burkle: Poor Little Rich Grocer
Click here to see the updated version of this story, posted Wednesday, June 11.
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RON BURKLE, THE BILLIONAIRE best friend of Bill Clinton, thinks he’s misunderstood. “It pisses me off that people think everything I do is for a return,” he complained during a rare, hourlong interview with L.A. Weekly — several days before Vanity Fair blistered him in its June 4 takedown of the former president.
But his public image as a backroom tycoon doling out big contributions for political favors, and VF’s slams of him for his business dealings with Bill, may be the least of his problems.
With Senator Barack Obama winning the Democratic presidential nomination, and with a definite power shift within the party that’s moving away from Bill and Hillary Clinton, political observers are already wondering if Burkle — a top-echelon supporter of the Clintons — will end up some kind of loser.
“If the winner is vindictive,” says Darry Sragow, a Democratic political strategist, “it could be a problem.”
Jeremy Bernard, a top fund-raiser for Obama’s campaign, simply states, “He won’t have the kind of incredible access he had with Clinton.”
And David Mixner, a longtime Democratic political operative who supports Obama, says, “For the first time I can remember, major donors don’t run the show. It’s the way the Obama camp has organized its campaign, and he has to make his case just like everyone else.”
Burkle, in other words, resides in very strange territory. For the first time in 16 years, the ultimate insider is just another rich, middle-aged man who likes to party. An ideal contributor for a candidate pushing change he is not.
RONALD WAYNE BURKLE, the working-class son of a grocery-store manager, made his initial fortune by smartly investing in the stock market at a young age and later buying supermarket chains such as Ralphs and Jurgensen’s. Burkle then forged good relationships with labor unions like United Food and Commercial Workers Union and sold the stores after they turned into profit makers. While building his financial empire, Burkle named his massive holding company after a town in San Bernardino County called Yucaipa, where he once lived. The Yucaipa Companies owns stakes in 35 businesses and manages four private-equity funds, according to Forbes. In 2007, that meant Burkle was No. 91 on the list of the Forbes 400 Richest Americans, worth perhaps $3.5 billion. The previous year, Burkle was No. 117, with $2.5 billion.
Burkle’s riches have bought him a customized Boeing 757, one of the swankiest estates in Beverly Hills, called Green Acres, built in 1929 by the famed Golden Age slapstick-film giant Harold Lloyd, and co-ownership of a professional hockey team, the Pittsburgh Penguins. The billionaire partier, age 55, often seems to hobnob with a far younger set, including actress Kate Hudson and hip-hop star Sean “P. Diddy” Combs, and recently attended actor Ashton Kutcher’s birthday party.
But it was his fortune, not his high-flying carousing, that brought him to the attention of fellow nightlifer Bill Clinton.
In his memoir, My Life, Clinton describes Burkle as “one of my best friends and strongest supporters.” The two quickly bonded during Clinton’s successful 1992 presidential campaign. “Burkle was always around,” says David Mixner, who was part of Clinton’s kitchen cabinet.
Over the next eight years, President Clinton stayed at Burkle’s mansion 80 times, and he has slipped into Los Angeles more than 100 times to visit the billionaire at his 44-room Mediterranean/Italian Renaissance–style manse in his post-presidency period. The two are so tight that when the Monica Lewinsky scandal hit, Carol Felsenthal wrote in her book Clinton in Exile, the president sought refuge at Green Acres.
“Burkle is very important to Clinton in supporting his library, his work in Africa, and giving him his airplane,” Felsenthal explains to L.A. Weekly.
A registered Republican until he met Bill Clinton, Burkle also holds major fund-raising events for other Democrats at Green Acres. In March 2007, the billionaire threw a star-studded blowout that hauled in a reported $2.6 million for Hillary Clinton’s presidential campaign.
Burkle is seen as a loyal friend of the Clintons, particularly the former president’s. “He’s more of a friend to Bill than Hillary,” says Felsenthal. The Clinton watcher also describes the relationship between the two men as a “real love affair.” “Burkle is a very smart guy,” Felsenthal says, “and Bill likes him on a lot of levels.”
The friendship has always been scrutinized by the press, but it made national headlines and put the blogosphere in a tizzy with the Vanity Fair article about Bill Clinton’s life after the White House. In the story — widely attacked for its poor sourcing, in which it uses blind quotes for some of its hardest hits — writer Todd Purdum quotes an anonymous source who describes Burkle and Steve Bing, another very wealthy Democrat donor, Los Angeles party boy and friend of Clinton’s, as “radioactive,” a reference to their fast lifestyles.
Several days before the Vanity Fair story hit the Internet, Burkle called me from New York City. I had already met with his spokesman, Frank Quintero, at the Yucaipa offices on the Sunset Strip in West Hollywood, where we discussed things “off the record” for an hour and a half. Days later, the phone rang and Burkle kindly introduced himself and said he heard the Weekly was writing an “unflattering article” about him. We then chatted amiably for an hour, just before Burkle flew in his private plane to Pittsburgh to watch the Penguins win a Stanley Cup game.
When the conversation was over, I contacted Republican political strategist Arnold Steinberg, to ask if Burkle’s ready availability was odd in some way. In an e-mail, Steinberg responded: “Ron Burkle is a hands-on guy. That said, it’s unusual that he would call a journalist directly and speak at length. ... He must feel he is a good communicator. In fairness, one cannot dismiss the possibility he feels he’s in the clear and has a story to tell. In the past, he had political counsel who would handle this situation. Either his political advisers are gone, or [they] advised him to confront the story head on. More likely, he decided the benefits of confrontation outweighed the risks of dealing with unpredictable questions.”
Throughout our conversation, Burkle was very sensitive about the nature of his relationship with Bill Clinton. He rebuffed any notion, for example, that his political connections with the Democrats or the former president have helped Yucaipa. “What I got out of it,” he insists, “is a great friend.” Burkle then talks about traveling with Clinton to Africa and how he’s been able to see more of his friend since he left the White House.
The billionaire seemed sincere in his fondness for Clinton, and although he didn’t say it outright, Burkle seemed offended by the idea that he used Clinton simply to make more billions. Burkle, though, apparently forgot statements he made to Forbes. In a December 11, 2006, piece titled “The Rise of Ron Burkle,” the billionaire described Clinton’s post-presidency work for Yucaipa as “invaluable,” noting, “My best call in corporate America isn’t one-hundredth of what President Clinton is just picking up the phone and saying, ‘Hey, we’ve got this idea, want to come talk about it?’”
Burkle also said Clinton “brands us to people who matter. He got us in with the Teamsters, and that’s important for deal flow going forward.”
In return for those lucrative rainmaker services, Clinton reportedly was paid $15 million by Yucaipa Companies between 2000 and 2007. Although a January 22, 2008, Wall Street Journal article reported Clinton was “negotiating to end his relationship” with the firm in order to appear fully independent during Hillary’s race, the former president never got around to it. He still has not severed financial ties with Yucaipa, and, Barack Obama having won the Democratic nomination, might not have to. “As we sell things,” he said during the Weekly interview, “[Clinton] gets a certain amount of money.” Those “things” tend to be major companies, with the former president receiving a slice of the profits.
BURKLE’S RELATIONSHIP with Clinton wasn’t always a hot item in the national media, but things drastically changed in 2006 when Burkle claimed that Jared Paul Stern, a reporter for the New York Post, attempted to shake him down. Stern wrote for the Post’s notorious gossip column, Page Six, which had been calling Clinton “President Horndog” and often cited Burkle as a partner in crime. “It was their way to get to Clinton,” says Burkle about the Post, “and I just happened to be there.”
Burkle insists that Page Six had it all wrong. He says he always took extra precautions in his private life whenever he was around Clinton and even told his girlfriends to sleep at a hotel when the former president was a guest at Green Acres so nothing would seem untoward.
He met with Stern to discuss toning down the “horrible shit” that was written about him and Clinton, he says. But, Burkle claims, the reporter repeatedly asked for money to fund his clothing line, Skull & Bones. The billionaire then contacted law-enforcement authorities, and the FBI investigated the blackmail charges. Stern, though, was never arrested for any crime. Burkle explains that away during our interview by saying reporters are held to a different standard under the law.
When asked about Burkle’s version of events, Stern writes in an e-mail to the Weekly: “[Burkle] arranged the first meeting in July ’05 using the clothing company as a lure, and that’s well documented. So it’s a little disingenuous of him to claim otherwise now — but then telling the truth was never his strong suit. Reporters obviously do not have different standards for what is considered a crime — criminal activity is very rigidly defined by the law and no one is above it, though people like Burkle seem to think they are. He’s simply trying to mask the fact that he knowingly made false accusations. As for the rest of his ridiculous comments, as the saying goes, he can tell it to the judge. I look forward to the day when this clown has to explain himself in court and risk committing perjury if he continues to lie.”
Stern was run out of New York City after a series of scathing articles about him ran in the Daily News — the archrival of the New York Post. Stern claims Burkle was the source of the information that destroyed his career and forced him to move out of pricey Manhattan — he now lives in the Catskills, where his wife initially took a job at a salad-dressing factory to support them.
“We had to liquidate our retirement accounts,” says Stern, “and we’re far from recovered. It was devastating. It was [a] nightmare. And it’s still not over.”
Stern is suing Burkle and the Clintons, among others, for defamation and additional damages, and says he was merely a “pawn” in a larger game of Burkle’s to force Rupert Murdoch to rein in the coverage about Burkle, the Clintons and their crowd by his New York Post reporters. (Murdoch owns the newspaper.)
Burkle openly admits he’s hardly above trying to manipulate the media. He says Stern is wrong about the details of their dustup, and that if he really wanted to get to Murdoch, he would merely have called him up — billionaire to billionaire — and “cut a deal.” In fact, Burkle says, “Murdoch wishes he made a deal.”
In the end, negative coverage of Hillary Clinton’s presidential campaign by the New York Post only grew more intense. Over Memorial Day weekend, the newspaper’s front page ridiculed Clinton’s remarks about the assassination of Robert F. Kennedy for two days in a row, with blaring headlines like “SHE SAID WHAT?” and unflattering pictures of the New York senator with her mouth hanging open.
ALL TAKEN TOGETHER, BURKLE’S political baggage looks awfully hefty, and is not something Obama would want to hang around his neck, especially with the campaign slogan “Change We Can Believe In.” Still, Darry Sragow, the Democratic political strategist, says, “Ron Burkle brings invaluable resources to the table that any political candidate will want to take advantage of.” And Dan Schnur, a Republican consultant, notes, “Obama needs to bring the party together, and Ron Burkle is a pretty good place to start.”
The Obama camp, though, remains cautious. “On the immediate side of things, [Burkle] certainly won’t have the relationship he’s had with Clinton,” says Jeremy Bernard, the Obama camp’s fund-raiser. “It could be that he builds the relationship, but if he comes aboard, he won’t suddenly be the main host, holding fund-raisers at his home.”
Regardless, Burkle has been reaching out. “I talked to [the Obama campaign] two months ago,” says the billionaire, “and I told them I was tired of all this partisan shit.”
Asked if he could deliver labor unions to Obama as some kind of olive branch, Burkle says, “That’s not what I do ... I don’t deliver my friends.”
Maybe not, but it seems the billionaire forgot to tell his labor-boss pals about his supposed firewall. Two days before Burkle spoke to the Weekly, Maria Elena Durazo, executive secretary/treasurer of the Los Angeles County Federation of Labor, rang the Weekly, apropos of nothing, and touted Burkle as an “exemplary employer.” When questioned about who asked her to make the unsolicited phone call, Durazo said she was asked by Burkle’s people.
Moreover, in the last election season, the billionaire who insists he doesn’t play that kind of game clearly tried to deliver his labor friends — in the 2006 California race for attorney general. Durazo told the Weekly Burkle “approached” the labor union about attending a fund-raiser for Jerry Brown, who later won his race for attorney general and is now eyeing the governorship.
Similarly, with relations tense between Obama and Hillary Clinton, Burkle told the Weekly he has been "more than willing" to act as a go-between for the two candidates. Politically, it's a smart move if he can come across as a peacemaker to both camps. (Burkle's media handlers say in a letter to the editor this week that Burkle never offered these mediation services to either candidate, as stated in the original Weekly story.)
But in what may be a sign of Ron Burkle’s future, no one, so far, has taken him up on the offer. The regular calls from the White House, and the jets that frequently arrived in L.A. to quietly offload the most powerful man in the world along with his Secret Service contingent, all bound for Green Acres, will very likely be no more.
Tips? Contact Patrick Range McDonald at email@example.com.
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