Enron-Linked Bush Official Out As Africa Fund Manager
July 7, 2008 - 8:30 PM
(CNSNews.com) - A prominent Democratic donor who was serving as the Bush administration's manager of a $350 million development project in Africa is out because of his failure to raise the required funds.
Frank Savage is also one of several former Enron officials being sued by the U.S. Department of Labor for "failing to protect [Enron] workers" whose life savings evaporated in the accounting scandal that bankrupted the energy giant.
In his role as the Bush administration's managing general partner of the Africa Millennium Fund, conducted under the auspices of the federal Overseas Private Investment Corporation (OPIC), Savage failed to reach the fundraising goals and OPIC decided not to renew his contract when it expired at the end of 2003.
"We believe that a reasonable amount of time was given to [Savage and] the fund managers and they were unable to do it," OPIC spokesman Larry Spinelli told CNSNews.com . Savage was named the manager of the fund in 2001.
As CNSNews.com has reported, Savage repeatedly failed to raise the required $122.5 million in private investments necessary to trigger the $227.5 million contribution from U.S. taxpayers and make the fund operational.
Spinelli said OPIC could no longer grant Savage any more deadline extensions.
"At this point, we feel that we provided a fair amount of extensions and have given the fund managers really ample opportunity in which to raise the capital and they have not been able to do that and so we think it's time now to move on," Spinelli explained.
"So that's the end of that," Spinelli added.
One of Savage's critics believes OPIC's decision was long overdue.
"[Savage] was given an enormous opportunity and he just could not fulfill the obligations that went along with it," Armstrong Williams, a nationally syndicated conservative columnist, told CNSNews.com.
"[Savage] was not prepared to fulfill the requirements, he could not raise the capital. It's more of a reflection of him than anything else," Williams said.
"[His selection] never made sense to a lot of people in the beginning. He was the wrong guy for that job," Williams added.
Under the terms of the project, designed to pay for energy, telecommunications and transportation projects in Sub-Saharan Africa, American taxpayers are to pay $227.5 million, and private investors are to come up with $122.5 million, for a total of $350 million.
Savage, who did not return a phone call seeking comment, has also had his share of bad news in recent years. He was named as a defendant in a lawsuit filed by the U.S. Department of Labor in June of 2003 for his role as a former director of the failed energy firm Enron.
"Today, the Department of Labor is filing suit in federal district court in Houston, Tex., to recover losses that Enron employees suffered due to the mismanagement of two of Enron's pension plans," said Secretary of Labor Elaine Chao in a June 26 statement.
The 46-page complaint is seeking a "court order requiring the defendants to restore to the [Enron employee retirement] plans all losses with interest, forfeit their right to benefits from the plans and permanently bar them from serving as fiduciaries to any plan governed by the ERISA (Employee Retirement Income Security Act.)"
A Bush administration official speaking under condition of anonymity told CNSNews.com last year that Savage's history with Enron was one of the prime reasons the Africa Millennium Fund had thus far failed to meet its financial goals.
"The inability of Savage to raise money with a government guarantee speaks volumes for the lack of confidence that institutional investors feel toward him," the official said in July after Savage was granted one of his fundraising extensions.
Savage's role in the Bush administration has irked some Republican partisans because of his Democratic Party ties. Time magazine, in a Jan. 14, 2002, article, called Savage "a major Democratic donor" who had given at least $100,000 to Democrats since 1999.
In addition to helping Democrats like former presidential candidate Al Gore and New York Sen. Hillary Clinton, Savage contributed to the campaign of New York Sen. Charles Schumer, according to Time.
But it's Savage's past as an Enron board member that raised the most controversy.
Journalist Joshua Green, who also edits Washington Monthly magazine, wrote in a June 2002 article published by the American Prospect that "Savage's record is appalling, even by the standards of Enron board members."
Savage "serve[s] as a reminder of the need for corporate responsibility," Green wrote.
Savage did defend his reputation in an April 2002 Wall Street Journal article, telling the newspaper that he had a "track record of integrity and honesty."
Savage also served as chairman of Alliance Capital Management International, which Florida state officials sued for negligence in May 2002. In addition to his role at OPIC, Savage currently serves as the chief executive of Savage Holdings, LLC.
Niger Innis of the Congress of Racial Equality (CORE), a conservative African American civil rights group, previously called Savage a "Bush hater" for his past donations to Gore and Sen. Clinton.
Innis called Savage's failure to come up with the private investments "a terrible disappointment" for President Bush during his trip to Africa in 2003.
Spinelli of OPIC is looking forward to a new manager of the fund.
"We need to move forward and make sure that private equity investment is going into Africa. That is really important," Spinelli said.
OPIC is currently issuing a "new call for proposal" on the Millennium Fund, according to Spinelli.
See Earlier Story:
Enron-Linked Bush Official Gets Another Chance to Restore Funds (Oct. 30, 2003)
E-mail a news tip to Marc Morano.
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