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William Sebastian Cohen

After three terms in Congress and four years as President Bill Clinton’s Secretary of Defense, William Cohen began raking in millions from the companies he had directly dealt with as a public official. Cohen seized on opportunities in China and Iraq to launch a lucrative second career with The Cohen Group, lobbying and consulting for the defense contractors he once oversaw at the Pentagon. Many senior-level executives of The Cohen Group left careers with both the Chinese government and the U.S. military.

Cohen was Secretary of Defense from January 24, 1997 until President George W. Bush took office on January 20, 2001. Under Cohen’s leadership, the Pentagon in 1997 dismissed the concerns raised over a deal that allowed Hong Kong-based company Hutchison Whampoa take over the ports on either side of the Panama Canal. A secret U.S. military intelligence report later called Hutchison’s chairman, billionaire Li Ka-shing, a risk for smuggling arms and “prohibited materials” into the United States. Li has ties to the Chinese military, and a U.S. army intelligence update claimed he is willing to use his business influence to help the Chinese government.

In 1999, Secretary Cohen flew 16 hours from Chile to London give a speech at the annual dinner of Global Crossing, an American telecommunications firm. Cohen joined Global Crossing’s board of directors in April 2001—three months after leaving the Pentagon. Three months later, the Pentagon awarded Global Crossing a $450 million telecommunications contract. (After protests from the other bidders, the Pentagon rescinded the contract and gave it to WorldCom, who, in turn, lost it when it filed for bankruptcy.) In January 2002, Global Crossing declared bankruptcy, amid an accounting scandal comparable to that of Enron. Cohen left Global Crossing during that time. Less than a year later, the Committee on Foreign Investment in the United States (CFIUS) blocked the sale of Global Crossing to Singapore Technologies Telemedia and Hutchison Whampoa.

In 2000, while still Secretary of Defense, Cohen advocated awarding a no-bid, $72 million contract to Iridium Satellite LLC, whose board featured former DHS chief Tom Ridge and A.B. “Buzzy” Krongard, the former Alex Brown chief who set up In-Q-Tel, a CIA-run non-profit that raises venture capital for companies who develop intelligence software. Dan A. Colussy is the CEO and Chairman of Iridium. Between 2004 and 2006, Cohen Group received $400,000 from Iridium to lobby the House, Senate and Department of Defense.

Cohen’s big project in the last five years has been The Cohen Group, which prides itself on its success in China. Three former officials of the Chinese government hold high level positions with The Cohen Group: Shan Cao, who spent six years with the Chinese government’s Ministry of Foreign Affairs; Shouqing Zhang, who spent more than a decade at China’s Ministry of Foreign Trade and Economic Cooperation; and Yinghua Wang, who was Deputy Director of Tianjin province’s Foreign Affairs Office for ten years. Cohen also brought on former high-level American officials: James Loy, a former deputy secretary of homeland security; former Undersecretary of State Marc Grossman; and Joseph Ralston, a retired Air Force general and the former vice chairman of the Joint Chiefs of Staff. James Bodner, The Cohen Group’s senior VP, once was in charge of national security reviews of “cross-border mergers” at the Pentagon under Cohen.

When the U.S. invaded Iraq, The Cohen Group moved in to help clients get reconstruction contracts. Among them was Nour USA, a four-month old company claiming ties to several companies backed or owned by Winston Partners, the investment firm of President Bush’s relatively unknown but fairly notorious brother, Marvin Bush. With The Cohen Group’s help, Nour won an $80 million contract to secure Iraq’s oil fields. The Cohen Group and DLA Piper Rudnick—which former CIA director A.B. “Buzzy” Krongard joined as a director in 2005—created a joint “Iraq Task Force” to “respond to increasing client interest in Iraq’s reconstruction.”

Cohen has served on the boards of other corporations. He was also on the board of the American International Group (AIG) from 2004 to 2006, the first U.S. company licensed to sell insurance in China. (In 2006, AIG settled civil and criminal charges of accounting fraud levied against it by then-New York Attorney General Eliot Spitzer, the U.S. Justice Department, the Securities and Exchange Commission and the New York State Insurance Department by paying a fine of $1.6 billion. Five days after the settlement was announced, Cohen decided not to accept another term on AIG’s board. Maurice “Hank” Greenberg, former head of AIG and the world’s 132nd richest man, is a long-time friend of Henry Kissinger, who has done consulting for AIG.)

Cohen served from 2002 to 2004 on the board of Critical Path, a software company in which Marvin Bush’s Winston Partners holds 5.5 million shares. Cheung Kong Holdings, a gargantuan conglomerate owned by Li Ka-shing, also holds shares of Critical Path. According to an article written for the Corporate Library, Cohen resigned after a quarter of all shares were withheld for his election.

That article addressed the fortunes of people who had been on the boards of companies—such as Enron, Global Crossing, Worldcom and Adelphia—implicated in accounting scandals. Cohen also resigned from the boards of NASDAQ and Cendant before board elections.

Cohen currently sits on the boards of media conglomerate CBS Corporation and tennis racquet manufacturer Head N.V.

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International Finance | Government Officials | Homeland Security | Defense | Energy

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