Gupta Mum on InfoUSA Controversy
Ronald Kessler
Friday, June 8, 2007
A database company that has lavished money on Bill and Hillary Clinton, has hired Nancy Pelosi's son, and is alleged to have aided scam artists had nothing to say about the controversies at its annual meeting Thursday.
In fact, Vinod "Vin" Gupta, the chairman and CEO of InfoUSA, refused to take any questions or allow any comments from stockholders. The meeting in Calverton, Md., lasted exactly four minutes.
Wearing a lavender shirt and a purple tie, Gupta hurried through routine business at the annual meeting and then announced it was adjourned. Guidelines distributed to the two reporters present from the Omaha World-Herald paper and from NewsMax said questions will only be taken from stockholders. However, Gupta did not allow any questions from the stockholders present, including representatives of Dolphin Financial Partners and Cardinal Capital Management.
InfoUSA is under fire in a shareholder lawsuit filed by those two Connecticut-based firms alleging that Gupta is appropriating company funds for personal use and his political pet projects.
Shareholder critics are furious that Gupta had InfoUSA pay former President Bill Clinton $2.1 million in consulting fees since he left the White House, with another $1.2 million currently being paid out.
Gupta has also spent nearly $1 million of InfoUSA funds to provide corporate jet flights for both President Clinton and his wife Hillary.
Gupta's decision to stonewall says as much about him and his management of the company as it does about stockholder meetings. While it is rare for publicly-traded companies to refuse to take stockholders' questions at their annual meetings, they are not required to do so. They are often perfunctory or turn into circuses.
After the meeting, Donald T. Netter of Dolphin Limited Partnership I, which, together with Dolphin Financial Partners, owns 2 million shares, or 3.6% of InfoUSA, commented, "They don't want to be accountable."
As NewsMax has reported, four weeks after Nancy Pelosi became speaker of the House, InfoUSA hired Paul Pelosi, Jr., a home loan officer, as a senior vice president making $180,000 a year even though he has no experienced in the company's business.
Moreover, Paul Pelosi continues to hold a full-time job at Countrywide Home Loans, part of Countrywide Financial.
Now it turns out Pelosi holds a third job as a managing director of Global Emerging Markets North America (GEM), a $1.8 billion private investment group. He is also a partner in its marketing and distribution arm.
In two interviews with NewsMax, Paul Pelosi confirmed that Gupta hired him as senior vice president for strategic development starting Feb. 1, just after Pelosi's mother took the gavel as speaker on Jan. 4. He said his mother is aware of his new job.
A person familiar with the arrangement says Gupta treats Pelosi as a "trophy" and has the speaker's son accompany him at high profile meetings around the country.
Pelosi denied the suggestion he is being used because of his family ties.
"I don't think that's really what happens," he told NewsMax.
Nor does he "think" his hiring was related to his mother becoming speaker, he said. But he acknowledged the timing raises a "good question."
"It's interesting, timing-wise," Pelosi conceded. "I don't see it that way, but I could see why you'd ask the question ... I guess you always wonder why somebody hires you, right?"
In the past, InfoUSA has provided marketing databases to unscrupulous persons who used the information to defraud the unsuspecting elderly, according to Iowa investigators.
InfoUSA advertised call lists with titles like "Elderly Opportunity Seekers" or "Suffering Seniors," a compilation of names and phone numbers of people with cancer or Alzheimer's disease. "Oldies but Goodies" was a list of 500,000 gamblers over age 55.
"These people are gullible," the company said in describing the list. "They want to believe that their luck can change."
Internal emails show the company continued to sell the lists even though its employees knew their customers were being investigated for fraud that victimized the elderly. InfoUSA has said the lists were aberrations and has said it would not engage in such practices again.
This week, Gupta, whose company is based in Omaha, told the Omaha World-Herald that in return for millions of dollars he has paid Bill Clinton as an advisor, he gets to drop the former president's name. Gupta claimed that is worth several times over what InfoUSA pays Clinton.
Without giving specifics, Gupta said Clinton gives advice on how to expand the company's services into new markets, and his expertise is used in the side of InfoUSA that sells services to political parties and candidates and nonprofit organizations.
In December, InfoUSA completed the acquisition of Opinion Research Corp, a polling company which has since formed a partnership with CNN to conduct all the cable company's polling through the 2008 election.
A press release announcing the partnership in January quoted Sam Feist, CNN's political director, as saying, "Opinion Research Corp.'s reputation for independent, objective analysis and its excellent reputation in the industry make the firm the ideal polling partner for CNN."
Feist said he believes Opinion Research will be a key part of giving viewers the "accurate and relevant information they demand" to help them make decisions as the network gears up for its 2008 election coverage.
Gupta told the Omaha paper Bill Clinton opens doors.
"He helps us meet some of the right people," Gupta said. "He has talked about us to a lot of gatherings ... In many speeches, he has mentioned InfoUSA by name."
After the publicity erupted, Gupta bowed out of a fundraiser for Hillary Clinton in New York—even though he is the vice chairman of the event.
"I've got other things to do," he told the New York Post.
