Rodham Brothers Abandon $118-Million Business Deal

Under White House pressure, First Lady Hillary Rodham Clinton’s two brothers pulled out of a $118-million proposed business venture in the former Soviet republic of Georgia on Thursday night, only hours after saying they would carry it through.

National Security Advisor Samuel R. “Sandy” Berger had urged Anthony D. Rodham and Hugh Rodham to drop the venture last week because it involved a controversial Georgian political figure who had suggested that the deal might bring him political support from President Clinton.

The brothers initially rejected the request. They issued a statement Thursday afternoon saying they had no reason to believe that their associates were involved in illegal activities. But they added that they would withdraw if “rumors or allegations” of wrongdoing were proved.

A few hours later, the Rodhams’ Washington lawyer, James Hamilton, said the brothers were withdrawing because they did not want “to do any harm to the first lady or the administration.”

A source familiar with the situation said White House officials contacted the Rodham brothers Thursday night to express concerns after learning they had rejected Berger’s request.

The Rodham brothers traveled to Georgia last month to promote their plan to invest $118 million in growing and exporting hazelnuts. Joining them at a rally for the venture was Aslan Abashidze, a local political leader who is a rival to Georgian President Eduard Shevardnadze. The United States considers Shevardnadze’s government an ally.

Intelligence and news accounts have linked Abashidze to alleged mobster Grigori Loutchansky. The State Department refused to grant Loutchansky a visa to the United States in 1995.

National Security Council officials say they were unaware of the Rodham brothers’ visit to Georgia until Shevardnadze’s government complained on Aug. 17 that the Americans had planned to head straight to Batumi, Abashidze’s stronghold.