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Judge dismisses Hillary as defendant, but she'll likely testify with ex-president

A judge in Los Angeles yesterday dismissed Sen. Hillary Clinton from a lawsuit by business mogul Peter Franklin Paul that alleges her husband, former President Bill Clinton, reneged on a $17 million business deal.

President Clinton however, remains a defendant and will be subpoenaed early next week to testify in a deposition. A trial date has been set, and Paul plans to depose Sen. Clinton as well.

Represented by the public-interest law firm U.S. Justice Foundation, Paul claims Bill Clinton agreed to promote Paul's Internet businesses after leaving office in exchange for his financial backing of a Hollywood gala and fund-raiser for Sen. Clinton's Senate campaign in 2000.

Paul charges President Clinton caused one of his public companies to collapse by diverting his Japanese partner's investments.

California Superior Court Judge Aurelio N. Munoz yesterday granted Sen. Clinton her motion to be dismissed from the case based on the state's anti-SLAPP law, which protects politicians from frivolous lawsuits.

As WorldNetDaily reported, Paul, claiming Sen. Clinton pulled off the biggest campaign-finance fraud in history, separately is preparing to file a complaint with the Federal Election Commission charging the Democratic senator with submitting a false report – for a fourth time – that hides his personal donation of a multi-million dollar Hollywood gala and fund-raiser that helped put her in office.

Paul insists Clinton's new amended report finally acknowledged his contributions but falsely classified them as being from his companies and from his business partner, Marvel Comics creator Stan Lee, instead of from him as personal gifts. Clinton should have refunded the money according to federal law, he contends, because it was intended for her national senatorial campaign, and the limit for such donations is $25,000.

Clinton's Senate office has not followed up WND's request to respond to Paul's claims.

Yesterday, Judge Munoz said Paul did not present enough evidence that Sen. Clinton was involved in the alleged business fraud in order to have her deposed as a party to the civil suit.

USJF attorney Gary Kreep told WND he questions the judge's reasoning.

"How can you prove your case if you can't take any discovery?" Kreep asked. "If you're not allowed to do any discovery and the judge says all you have are allegations and no proof, it's a circular argument."

Munoz, however, ruled Clinton attorney David Kendall could not deny Paul any witnesses as the case proceeds, and Sen. Clinton likely will be deposed as a material witness.

Commenting on the decision to dismiss Sen. Clinton as a defendant, Paul told WND, "California's anti-SLAPP law creates the absurd situation where a candidate is protected in defrauding business people in order to finance a political campaign."

Paul insists the broadness of the protection of political speech must be challenged.

"What better case to bring before the U.S. Supreme Court than Hillary's admitted fraud on the FEC and on the voters and on my business," he said.

Meanwhile, a trial is set for March 27, 2007, and depositions will begin immediately. Also named in the case are Sen. Clinton's former campaign finance director David Rosen, Hollywood gala host Gary Smith and James Levin, an aide to President Clinton involved in the business deal.

Kreep told WND he will send out a formal notice early next week to have President Clinton deposed.

President Clinton cannot object to it, because he is a party to the case, Kreep said, but he expects delays.

At the hearing, Kendall indicated he will file a summary judgment to dismiss the case, arguing President Clinton's contract with Paul was void because of public policy considerations.

Kendall did not specify the considerations.

Kreep questioned Kendall's claim.

"[Bill Clinton] got Peter Paul to spend all this money on Hillary Clinton's campaign, he destroyed Peter's company, but he's not liable because the contract was not valid to begin with?"

Paul alleges he discussed President Clinton's future employment with Sen. Clinton on numerous occasions, at two fund-raising teas, the Hollywood gala and at entertainer Barbra Streisand's house the next day.

In her declaration, Sen. Clinton acknowledged spending time with Paul on each of those occasions, but said if there was any discussion of her husband's employment with Paul, she would have remembered it.

Paul told WND, "Mrs. Clinton has a history of memory lapses in the multiple investigations in which she's been called to testify."

"I'm looking forward for discovery to refresh Mrs. Clinton's recollection," he said. "She engaged in actions that are clear in terms of her role in assuring me that Bill Clinton would work with me."

Paul stated in his declaration to the court, "Mrs. Clinton personally assured me she would specifically discuss with her husband, the President, my interest in making a post-White House business proposal to him. She told me her understanding that such a proposal would include my offer of substantial support for her Senate campaign as a good-faith advance on the business arrangement he would be agreeing to."

Kreep commented: "Hillary Clinton has a history of denying involvement in anything that will make her look bad. Remember that her joint-fundraising committee has now been forced by the FEC to admit $721,000, which she denied ever existed. Now it's been proved they did receive it."