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For an honorary consul in America: deal or no deal?

By Marcus Stern

WASHINGTON (Reuters) - When Jill Kelley was appointed honorary consul for South Korea in Tampa, Florida in September she became one of more than 1,200 people recruited by countries around the world to represent their interests in towns and cities across the United States.

For the Tampa socialite it was a short-lived honor. Within months she had become a prominent player in a national scandal that led to the resignation of CIA Director David Petraeus. South Korea quickly rescinded her appointment.

The incident, and a subsequent allegation that Kelley had tried to gain financially from the post, drew unwonted attention to honorary consuls and raised questions about just what they do and whether they might exploit their privileges.

The positions are usually unpaid, although South Korea says it offers its honorary consuls a nominal sum of about $1,500 a year. But they bring the appointee status and perks -- like speeding through airport immigration lines and the right to fly the nation's flag on their car.

What honorary consuls do in return varies widely. Some notarize documents, promote trade and tourism, and issue emergency passports to foreign visitors. Others perform almost no official duties.

There is no written rule against honorary consuls engaging in commercial deals that might benefit both the country they represent and their own interests.

The State Department issues pink-rimmed ID cards to all honorary consuls but relies on other nations to vet the appointees and monitor their activities, said Lawrence Dunham, former assistant chief of protocol for the State Department.

"The U.S. government doesn't conduct a separate background check," said Dunham, who retired in 2005.

The State Department did not respond to queries seeking information about the honorary consul corps in the United States. Several people interviewed said the United States itself does not appoint its own honorary consuls overseas.

KELLEY HIT THE GROUND RUNNING

South Korean Foreign Ministry officials said Kelley's appointment was signed by Han Duk-soo, who was prime minister in 2007 and 2008 and is now the chairman of the Korea International Trade Association.

No other details were available about how Kelley secured the position. By all accounts she approached her responsibilities with zeal but within months her life was thrown in turmoil.

An FBI investigation she initiated into threatening emails she had received unexpectedly revealed an affair between Petraeus, who Kelley had known when he was stationed in Tampa, and his biographer, Paula Broadwell. The general announced his resignation on November 9.

In the weeks that followed, her life and business contacts were closely scrutinized in the media.

Adam Victor, an energy entrepreneur and president of New York-based TransGas Development Systems Llc, said in an interview with Reuters that Kelley told him she got her honorary consul status with Petraeus' help. Kelley's attorney denied Petraeus was involved.

Victor also quoted Kelley as saying she could use Petraeus' influence to set up a meeting with the South Korean president on Victor's behalf to facilitate what Victor described as a $4 billion "mega-deal."

In an email dated September 13, Kelley wrote to Victor: "My fee to bring this to fruition will be 2 percent."

A spokesperson for Kelley told Reuters by email that Kelley "was not doing a potential deal as consul."

But emails she exchanged with an official at the University of South Florida around the time she was dealing with Victor suggested otherwise.

"I was nominated for this diplomatic appointment, for the purpose to facilitate new agreements in the USA with my contacts," she wrote in a September 7 email to Stephen Klasko, dean of the University of South Florida's Morsani School of Medicine and chief executive officer of a company called USF Health.

"In this position, I have a unique opportunity to propose bids because, of my relationship with the top executive branch of Korea...," she said in the email, seen by Reuters.

She asked Klasko if he had any interest in "a medical, pharmaceutical or research exchange between USF and Korea." Nowhere did Kelley suggest a fee for herself and officials at the university said no deal resulted from the exchange.

PROFITS ARE "QUESTIONABLE"

Honorary consuls contacted around the United States said it was not unusual for people in these posts to cut themselves in on deals.

Jonathan Warren, the honorary consul for the Monaco in Las Vegas, said: "Is it prohibited by virtue of being an honorary consul? No, of course not," he said. "In fact just the opposite is true in practice because a lot of times people are appointed because they've brought business" to the country they represent.

This wasn't true in his case, he added, saying he sought to be the honorary consul of Monaco because of his frequent visits to the Mediterranean coast principality.

The dozen honorary consuls interviewed for this article had varying views about the permissibility of profiting from deals they helped broker. The former assistant U.S. chief of protocol Dunham said it was "not prohibited, but questionable."

Article 57 of the 1963 Vienna Convention on Consular Relations bars career consuls from engaging in commercial activity but is silent on that point when it comes to honorary consuls.

Arnold Foote, president of the World Federation of Consuls, told Reuters the organization makes a distinction between routine consular duties -- notarizing documents and handing out passports -- and separate business activities.

The organization, which was formed in 1982 and provides guidelines for consuls around the world, "is concerned only with their role as Honorary Consul, not with other roles where questions of 'deals' or 'profits' might arise," he said.

Many consuls interviewed said the practice of brokering deals and taking a fee is rare and distasteful.

"There's certainly nothing that says you can't make money from doing this, but it's not why the people I know do it," said Josh Hanfling, honorary consul for Morocco in Denver.

Denver lawyer Frank Schuchat said his appointment as an honorary consul for Belgium in his city might have helped his legal business, but "if that were my motivation, the whole project would have been a failure."

CARICATURE OF A CONSUL

Most honorary consuls are unpaid and do not get reimbursed for expenses. Most seek the post because of an ancestral tie to the country, several said.

Several scoffed at the caricature of them emerging from media coverage of Kelley as wealthy, well-connected party-goers drawn to the role for its social cache, although some hobnobbing is involved, they said.

Toby Unwin, a native of England, became Austria's honorary consul in Orlando, Florida, in 2006.

"Wheeling and dealing and schmoozing somewhat comes with the territory," said Unwin. "Countries usually look for people who are well connected in the local country. They don't want people nobody knows."

British author Graham Greene presented a scathing view of the honorary consul role in his 1973 novel, "The Honorary Consul," which was later made into a film. The main character is a British expatriate serving as an honorary consul in northern Argentina, where he lives a debased life as a besotted, lecherous low-life who abuses his title.

"It put us in an even less attractive light than Ms. Kelley did," said Schuchat, the Belgium honorary consul in Denver. "Ms. Kelley is probably more known than any other honorary consul in the country and that's just not fair."

(Additional reporting by Jack Kim, Arshad Mohammed and Colleen Jenkins; Editing by Warren Strobel, Karey Wutkowski and David Storey)

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