Socialite's climb halted by unfolding scandal

Associated Press Modified: November 14, 2012 at 9:16 pm •  Published: November 14, 2012
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  During a news conference Wednesday, Cohen said both sisters had been heard dropping Petraeus' name often, though he never heard Allen's name invoked. He said both subscribed to the idea that you should "join these clubs and have these parties and drop these names."

Referring to Jill Kelley, he said: "She does what she thinks is necessary to be perceived as being important."

Her apparent importance and connections were described to Victor, when the New York businessman was introduced to her.

"We went down to the convention to spread our message about coal gasification and I met someone who seemed to be very well connected in Tampa" — and was described as a friend of Petraeus and someone who could deal with the president of South Korea.

In an interview, Victor continued: "It was Jill Kelley. She was a very vivacious women. She seemed eager to assist us in our project and she confirmed that she was very close to Gen. Petraeus ..."

Victor said she talked about helping with a non-competitive bid. "And so that if the (South Korean) president liked it, as a favor to Gen. Petraeus, there would be one no-bid contract. Every developer likes a no-bid contract, or sole source. This certainly seemed worthwhile pursuing."

Victor said his company flew Kelley to New York, first class, for meetings, and then she flew to Hawaii, allegedly for meetings on the deal.

They discussed her compensation, Victor said. "I said, 'what do you think a fair fee would be?'" And she emailed me back, 2 percent of the deal," which he said could have amounted to tens of millions of dollars.

The company decided to work through others on the deal. "We decided that she simply was not a skilled negotiator in these large projects, she's never been in these large projects and I sort of felt that I wasted my time," Victor said.

   In 2005, the Kelleys established Doctor Kelley Cancer Foundation Inc., with themselves and Khawam as its sole directors, according to the Florida Department of State. Its mission statement says the organization, which was based out of the Kelley home, was created to "conduct research studies into efforts to discover ways to improve the quality of life of terminally-ill adult cancer patients." 

In 2007, the last year for which it filed paperwork, the foundation reported revenues of $157,284 to the Internal Revenue Service, all from direct donations, according to its tax filing. The document lists expenses totaling precisely the same amount, including $43,317 for meals and entertainment, $38,610 for travel, $25,013 in legal fees, $8,067 for supplies and $5,082 in phone bills.

The filing claims $58,417 of its expenses went toward program services, but it's unclear what those services entailed.

Christopher Pietruszkiewicz, dean of the Stetson University Law School and expert on non-profits and taxation, said the foundation's filing "raises a lot more questions than it does provide answers."

"I'm not sure that we can come up with any conclusions about how the money was spent by the organizers of the charitable organization, but it does give us a sense about how $157,000 was spent," he said. "And I do think it raises some issues that either the Internal Revenue Service or the State of Florida may be interested in looking at."

The Tampa Bay Times reported Wednesday that as late as February 2010, Jill Kelley was soliciting contributions in the foundation's name to fund a dinner for the homeless. The paper cited an email in which she asked prospective donors for "'in kind' donations (i.e. more food, drinks, banners, decorations)" and noted that the charity was a "tax write-off."

As the Pentagon looks into up to 30,000 pages of emails and other documents — some characterized as "inappropriate communications" — between Jill Kelley and Allen, MacDill's commander on Tuesday revoked her access pass.

Kelley was issued the pass, one of about 800 handed out under a program to promote interaction with the civilian population, in November 2010, according to a military source, who spoke on condition of anonymity because the person was not authorized to comment on the situation.  It was renewed this past February.

Several months ago, Jill Kelley was appointed an honorary local consul for South Korea, said Kristen Smith, executive assistant at the South Korean consulate in Atlanta, which also covers Florida. The license plate on Kelley's silver Mercedes-Benz reads, "Honorary Consul 1JK."

Smith was not authorized to say anything more about Kelley's activities on that country's behalf, although she confirmed that Kelley still maintained her position. When Kelley called police Tuesday to complain of reporters staking out her home, she cited her honorary position and requested "diplomatic protection."

During last year's FBI citizens academy, which Kelley attended, Natalie Shepherd, a reporter with Channel 8 in Tampa, was one of two media representatives also invited. Among the 30 people on the list was the head of the host committee for the Republican National Convention, a vice president of security for Walt Disney Corp., and the Hillsborough County tax collector.

"She's the only person on the list who's just listed as her name," said Shepherd.

Each Tuesday evening session at the local field office covered a different topic, such as domestic terrorism, international terror or cybercrime. Shepherd said agent Humphries led one talk about Afghanistan.

  Shepherd recalled Kelley as attentive and inquisitive, but otherwise low-key — especially given recent revelations.

  "She wasn't dropping names or alluding to those connections at all," she said. "She seemed like one of the normal people in the class."

  The FBI did not immediately return a call requesting information on whether Kelley and the class.

Fodiman, the magazine publisher, said there's a sense that Kelley's many efforts to rise socially have been undercut by the scandal.

  "I think she has now been tainted," he said. "Just too much has come out, that even if it's not true, people will remember. I would imagine that they will ultimately leave the community."

  ___

  Cassata reported from Washington. Also contributing to this report were Associated Press writers Matt Sedensky and Tony Winton in Tampa, and Adam Goldman in Washington.

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