Sen. Hillary Clinton greets Peter Paul at the Hollywood gala he financed in exchange for her husband’s role as a “rainmaker,” or promoter of Paul’s company (Courtesy

A multi-million-dollar fraud suit against Bill Clinton faces further delay after a judge ruled yesterday the discovery process – which likely would require the former president and his wife Sen. Hillary Clinton to testify under oath – cannot proceed until a related appeal is resolved.

As WND has reported, business mogul Peter Franklin Paul claims Bill Clinton destroyed his entertainment company, Stan Lee Media, to get out of a $17 million deal in which the former president promised to promote the firm in exchange for Paul’s massive contributions to Sen. Clinton’s 2000 campaign.

Los Angeles Superior Court Judge Aurelio Munoz yesterday – ruling in favor of the Clintons – decided that because of the unresolved appeal he had no jurisdiction to accept a second amended complaint from Paul, which places emphasis on President Clinton’s alleged role in destroying Paul’s company.

The appeal preventing the case from moving forward was filed by Paul’s attorney, Colette Wilson of the United States Justice Foundation, after a decision by Munoz in April to dismiss Sen. Clinton as a defendant in the lawsuit.

Regardless of the outcome of the appeal, Sen. Clinton will be deposed as a material witness in preparation for a trial scheduled to begin March 27, 2007.

Wilson told WND her client Paul essentially has control over how the lawsuit proceeds because if he decided to drop the appeal, the case would move forward immediately.

“This doesn’t actually set our case back, except for timing,” Wilson said after the decision. “The court hasn’t issued a ruling that says you can’t file your second amended complaint; it says you have to wait.

Peter Paul and Bill Clinton (

“I think the Clintons are on notice that they’re not going to get away from saying we didn’t destroy the company ourselves,” Wilson declared.

At the hearing yesterday, the attorney argued the other defendants are proceeding to trial and have no other issues they can appeal.

The court also was unable to address a charge by Paul’s legal team that the Clintons’ longtime attorney David Kendall filed a fabricated statement in a court brief ahead of the hearing.

Wilson’s complaint asserted Kendall cobbled together two unrelated quotes from a March 2005 federal court hearing to make it sound as if Paul admitted personal responsibility for the collapse of Stan Lee Media. If Kendall’s argument were to succeed, it would undermine the basis of Paul’s case, which asserts Clinton was the cause of his company’s demise.

President Bill Clinton celebrating business deal with Peter Paul and wife Andrea (Courtesy

Paul alleges that after he donated $1.9 million of cash and in-kind contributions for Hillary Clinton’s Senate campaign, Bill Clinton directed his associate, Jim Levin, to convince Paul’s Japanese partner – in violation of a confidentiality agreement – to incorporate a new company instead of investing another $5 million with Paul. The loss of that badly needed capital ultimately caused Stan Lee Media to fold, Paul maintains.

Wilson says Kendall pieced together a sentence from Paul’s allocution – a defendant’s formal explanation of his actions to the judge before sentencing – and another from final comments to the judge to make it sound as if Paul were apologizing for the collapse of his company.

In the March 2005 hearing, Paul pled guilty to a 10(b)5 violation of the Securities and Exchange Commission for not publicly disclosing his control of Merrill Lynch margin accounts that held Stan Lee Media stocks and for certain transactions in mid-November 2000 to keep the stock from losing value.

Paul points out Federal Judge Gary Feess ruled in his dismissal of a civil lawsuit brought by Stan Lee Media against him and Merrill Lynch in July 2003 that the “collapse of the margin scheme did not cause SLM’s stock to decline in value” and therefore was not responsible for the demise of the company. Paul says the judge’s ruling supports his case, by determining it was the financial condition of the company that caused the collapse. The purpose of the margin scheme, the judge determined, was to benefit Stan Lee Media.

Kendall says in his opposition brief President Clinton “strongly objects” to Paul’s “attempt to blame” (Clinton) – for the first time – for the collapse of Stan Lee Media, Inc. and to increase the alleged damages over fifteen-fold.”

Kendall asserts Paul has been constantly changing his story – and his legal claims – for over five years.”

Peter Paul and Sen. Hillary Clinton (Courtesy

The first complaint, June 19, 2001, Kendall argues, contained only one cause of action against Clinton, for unjust enrichment, and mentioned the Japanese partner, Tendo Oto, only briefly.

“The original complaint did not allege an employment agreement between Paul and Clinton, that President Clinton committed fraud and that he interfered with Paul’s relationship with Oto or that former President Clinton was responsible for the collapse of SLM,” Kendall stated in his brief.

Paul says Kendall’s claims are “patently false,” pointing out the assertions were included in the original 2001 complaint, which attributed the damages done to his company to Clinton directing Levin to interfere with Oto.

Regarding the damage amount, Paul says the previous two complaints have had enough facts from which to infer the figure, but the new amended complaint states it explicitly, although there is no obligation to do so.

“I was worth $50 million when I met the Clintons, I was worth zero after the frauds they perpetrated on me,” Paul said. “Those facts never change.”

The reason the complaint was amended again, Paul said, was because in an April 7 hearing in which Sen. Clinton was released as a defendant, the court said it believed the case to be a political vendetta between two families. The pleadings, therefore, were changed to emphasize that Paul sees himself not as an aggrieved political contributor but as a victim of fraud in the loss of his business.



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