Hillary Hits Her Hut; or, How I Was Shanghai'ed at the US Pavilion, as told by the American Secretary of State (her eyes now wide-open!)

On her way to strategic talks with China, punctuated by a rogue North Korean torpedo that "accidentally" hit its target, Secretary of State Hillary Clinton breezed by the US Pavilion at the Shanghai World Expo, "the House that Hillary built," as the New York Times' Mark Lander put it (Interestingly, John Pomfret in the Washington Post used almost the same phrase to describe the US Pavilion. A strange coincidence.) Clinton was there to pay obeisance to the Expo hosts but even more to the gathered Chinese and American CEOs, expat shills, and State and consular officials who engineered the debacle.


And a debacle it is. According to Pomfret:

China had given the United States a choice spot at the fair, but the Americans weren't coming up with any money to build the building. So Clinton took over and, employing her formidable fundraising talent, along with the help of a few old friends, succeeded in raising $60 million for the U.S. pavilion. Organizers formed a charity, ensuring that most, if not all, of the donations could be written off. Corporate America began to pony up.

The result, however, resembles more a convention center in a medium-size American city than a showcase for the United States -- a warren of dark rooms with movie screens that pales in comparison to the ambitious pavilions of, among others, Saudi Arabia, which features the world's biggest Imax screen, and Germany, festooned with hundreds of giant red balls. Even the North Korean and Iranian pavilions, located side by side, seemed more inviting....

In addition, the message that Clinton saw Saturday at the American pavilion was so laden with corporate advertising that even some of the visiting U.S. officials seemed a little taken aback.

Apparently Clinton had a similar experience and was not amused. According to Landers of the NY Times:

After touring the pavilion -- with its Citibank- and Pfizer-sponsored theaters, gauzy eight-minute videos featuring representatives from Chevron, General Electric, and Johnson & Johnson, environmentally friendly features sponsored by Alcoa, and a gift shop with licensed merchandise from Disney -- Mrs. Clinton seemed less inspired than relieved that the project was done.

"It's fine," she said to a reporter asking her what she thought of the pavilion. "Can you imagine if we had not been here?"

Well that depends. If you're talking about immediate money to be made by the organizers and their multinational sponsors, probably not. If you're talking about the long-term consequences of portraying Americans as children and the pawns of corporate power, well, we're stuck with it, it's not our imaginations that matter.

But better yet, can you, Secretary Clinton, imagine if we were there with a really good US Pavilion, one that was authentic and helped the Chinese people to really meet us without commercial intervention? Most Americans I talk to can. That's why they're disappointed when they learn we're not.

Clinton might have had reasons other than aesthetics for ruing her involvement with the US Pavilion. IRS documents I recently obtained reveal that Clinton and her predecessor, Condoleezza Rice, were each duped into signing letters claiming that the US Government cannot fund participation in Expos because of restrictive legislation -- a blatant lie (repeated, slightly weasel-worded, in Landers' account). The letters were then included in the pavilion organizers' application to the IRS for an expedited tax exemption on grounds of urgent necessity, implicating both Secretaries in the deception.

Further, Clinton, egged on by Consul General Bea Camp, operatives in State's Bureau of Educational and Cultural Affairs, and the pavilion organizers, had already raised tens of millions of dollars for the allegedly tax-exempt pavilion months before it applied for, let alone received, an IRS determination letter that it was indeed tax-exempt.

In Clinton's defense, the normally meticulous IRS was fooled, too. In June 2009 when the pavilion organization filed for its expedited tax-exempt status, which it received a scant 25 days later, it was ineligible for the privilege. Its DC Certificate of Incorporation had been revoked by the DC regulatory agency months before for failure to file necessary papers and according to DC, remained revoked until January 19, 2010.

The organizers -- Covington & Burling attorney and lobbyist Ellen Eliasoph, Hollywood movie man and Expo dilletante Nick Winslow, and former Bush Under Secretary of Commerce Frank Lavin -- have a history of fudging the truth and skirting the law. Not only are their required 2008 and 2009 tax returns delinquent (they have never opened their books to the public) and their application to the IRS is rife with potential conflicts of interest that Shanghai correspondent Adam Minter has reported on in his Shanghai Scrap blog and here on the HuffPost. One involves the payment of $23 million -- a third of the Pavilion's reported cost -- for three short films, some videos, and a theater to see them in allegedly arranged early on by organizer and nonprofit board member Winslow for one of his consulting clients.

In an earlier HuffPost article, I explained the history for these abuses. I traced this ongoing faux pas back to the Bush strategy for privatizing the US Pavilion(evidence is provided on Minter's blog), a policy that Rice et al bobbled but that Clinton, also a fan of privatized public diplomacy, picked up and ran with, scoring her fundraising coup. In a press release I published on the eve of Clinton's arrival in Shanghai, with links to a corresponding article on HuffPost, I described the implied "excess benefit transactions" offered to the pavilion's sponsors (whom the organizers address as "marketing partners) -- a real no-no for the IRS, when a contributor to a tax-exempt organization gets back more financial benefits than the contribution it made.

(You can find online the formal Complaint I simultaneously made to the IRS, containing these and a raft of other sordid facts.)

As now honestly noted in the mainstream press, the resulting US Pavilion is not only fraught with potential illegalities (dare I say, potential fraud?) but also quite unappealing, especially to Americans who know better than to believe the cotton-candy films that depict nothing concrete or genuine about America or its people, only "Hollywood flash" fantasies (as one trade journal put it). As Scott Edwards, half of a globe-trotting entrepreneurial pair, describes the US Pavilion on his Living Radically blog:

The Pavilion sponsors are prominently featured throughout the pavilion. When you first enter, there is a massive wall with dozens of corporate logo's thanking them for their generous donations. For comparison, many other countries had corporate sponsors and thanked them in a similar way, but that is where it stopped.

Not in the USA pavilion though. The magic of product placement suddenly found public relations reps from the top sponsors speaking in the documentary style movies about questionably related items. You saw a Chevron executive talking about how his company is leading the way in green energy (despite their somewhat conflicting interest in oil drilling). A female executive from PepsiCo talked about what it means to be a healthy American family, even as she sells sugary drinks to kids in public schools. I literally winced each time one of these people came on screen, knowing they had paid for the ability to say whatever their branding guidelines determined was appropriate.

Thinking the worst was over, I was relieved to be done with the best of American cinema [sic] and head into the hall that in most countries displays their latest technology, sustainable development projects, facets of their people and history, really anything. Instead I was confronted with what can only be described as Time Square hall. The walls were lined with bright advertising displays from the corporate sponsors of our pavilion. FedEx, American Airlines, GE, Pepsi, the list goes on and on. Several feelings flowed through my body in a crescendo of anger: shock, embarrassment, offense and resentment.

Is this the best America has to offer? Is this what we really want China's experience with the USA to be? I was dumbfounded. It makes me mad even now just thinking about it. America has so much more to share than we showed off at this pavilion. Why not showcase the ingenuity and creativity of our startup culture? Show new companies changing the world through business means. Why not show some of our founding documents with their dramatic and powerful language of equality and prosperity for all? If you want to stick with the Hollywood theme of the pavilion, why not have a display with the highlights of the best of American cinema and music? Really anything would have been better than selling the floor space to these corporate "donors."...

The bottom line is that I left the USA pavilion with the impression that money gets you anywhere in America..."

The Post's Pomfret put the question directly to pavilion organizer Lavin: why?

Frank Lavin, who is the chairman for Public Affairs for Asia Pacific at Edelman, said that decision was made on purpose. "We're trying not to be provocative," said Lavin, who was the chairman of the steering committee for the U.S. pavilion. He said there had been a "wide-ranging debate" among the corporate sponsors and other members of the committee about what type of message the pavilion should have. Other choices, he said, were "sustainability" and "teamwork."

Too bad, because sustainability is one of the "Better City, Better Life" Expo's main themes. Oil companies, big-box retailers, and sugar water vendors are hardly the ones to be speaking for America in this venue. However, they're the only ones represented in the US Pavilion.

According to hearsay making the expat rounds, the whole mess has caused ruptures among the various parties involved: the organizers, Commissioner General Villarreal (nominally responsible for the US Pavilion, but brought in too late to do much about it), the consular staff (a shifty crew who muscled this deal), the local American Chamber of Commerce (a favorite target for expats' darts), the sponsors, (err, marketing partners), State Department staff at home (not one of whom has a clue about Expos or pavilions), the Expo hosts (who have millennial-long memories), and not least of all, Hillary Clinton herself.

After all, the failure of the US Pavilion would threaten her main public-diplomacy privatizing scheme, the Global Partnership Initiative run by friend Elizabeth Bagley and modeled on the (Bill) Clinton Global Initiative. Amid rumors that she is a one-term Secretary of State, Clinton will not want to jeopardize the vehicle that together with Bill's network, elevates the pair to a position of supreme importance in the world of power, the first King and Queen of the World.

Can you imagine if we hadn't been there?

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While I was writing this entry, Adam Minter was publishing his own observations regarding the Clinton visit on his Shanghai Scrap blog In it he posts a link to his "Reporter's Guide to the USA Pavilion." Press dudes and dudettes, read it. This is a big story over most American's cognitive horizon. Bring it home.