Hillary's brothers, two furious presidents and a hazelnut deal in the land of the Golden Fleece

See apology It is a land which has always attracted adventurers. It was to the western coast of Georgia, where the tree-clad mountains of the Caucasus plunge into the Black Sea, that Jason and the Argonauts sailed 3,000 years ago in their search for the Golden Fleece. But who would have expected their modern day counterparts to be Hugh and Tony Rodham, two middle-aged American businessmen distinguished solely by the fact they are the brothers of Hillary Rodham Clinton, wife of President Bill Clinton and possibly the next senator for New York.

See apology It is a land which has always attracted adventurers. It was to the western coast of Georgia, where the tree-clad mountains of the Caucasus plunge into the Black Sea, that Jason and the Argonauts sailed 3,000 years ago in their search for the Golden Fleece. But who would have expected their modern day counterparts to be Hugh and Tony Rodham, two middle-aged American businessmen distinguished solely by the fact they are the brothers of Hillary Rodham Clinton, wife of President Bill Clinton and possibly the next senator for New York.

Jason was looking for the Golden Fleece and to get it he braved moving rocks which tried to crush his ship and an army of skeletal warriors.

The Rodham brothers' objective was, if anything, more bizarre. They wanted to become kingpins in the Georgian hazelnut industry. But, like the Argonauts, they found their quest for the small brown nut, which grows in profusion on the slopes of the mountains overlooking the Black Sea, involved unexpected perils.

Within days of getting off their plane in Tbilisi, the capital of Georgia, last August they found themselves accused of involvement with the Russian mafia, fostering a separatist movement and were on the receiving end of anguished pleas from the White House to get out of the hazelnut business.

Photographs taken of the Rodham brothers at the time, one paunchy, the other lean, show them beaming at the camera, but there is, perhaps, a touch of unease and bewilderment in their faces. It is as if they were beginning to realise that Georgia is a more complicated place than they imagined.

Independent since the break-up of the Soviet Union in 1991 it is today corrupt, bankrupt and deeply divided. "Georgia is a banana republic in the full sense of the term," one local observer told me in Tbilisi. But the Georgian President, Eduard Shevardnadze, the former Soviet foreign minister known locally as "the grey fox", likes to boast that he is a close friend of international leaders like Mr Clinton. Not surprisingly he was appalled to discover that the President's brothers-in-law were not only in Georgia but about to do business with one of his bitterest rivals.

The Rodhams' destination in Georgia was Batumi, the capital of Ajaria, a lush sub-tropical paradise on the Black Sea protected by mountains on three sides. It rarely snows and palm trees grow by the shore.

The very name Ajaria sounds like one of those fantasy Italian dukedoms where Shakespeare liked to set his comedies. And the similarities do not end there. For the last 10 years the reigning, if democratically elected, duke of Ajaria has been Aslan Abashidze, a poet and painter, who is a direct descendant of the princely family which ruled Ajaria for hundreds of years before the Bolsheviks captured it in 1921.

A short, distinguished looking 61-year-old, he is, like most Ajarians, a Muslim but not a very fervent one. Batumi has only one mosque. More striking is Mr Abashidze's fondness for grand opera and last year he staged Verdi's Otello in a reconditioned theatre in Batumi.

"You can't do business without him in Ajaria," said a sympathetic Georgian. "But, unlike most other leaders in the region, he gives something back to the people in the shape of schools, hospitals and bridges." He is also at daggers drawn with President Shevardnadze and the government in Tbilisi.

Mr Abashidze denies that he has any thoughts of secession, but he controls the local police and almost everything else which happens in Batumi, Georgia's second city with a population of 300,000. A cold war rages between him and the central government. He accuses Mr Shevardnadze of blockading Ajaria, diverting ships from its deep port to a smaller one controlled by the government further north along the Black Sea coast.

In the early Nineties, Tbilisi even tried to send the Georgian army across the mountains into Ajaria. The soldiers turned back after Mr Abashidze, who is immensely popular locally, asked women and children tolie down in front of the oncoming tanks.

The arrival of Tony and Hugh Rodham in Batumi last year was good news for Mr Abashidze. They appeared to be offering a big investment - $118m (£80m) over six years to process the hazelnuts and export them to the West through a Georgian-American joint venture company called Argo Holdings (Argo was, of course, the ship of the Argonauts).

It was not necessarily a stupid plan. Most of the world's hazelnuts come from northern Turkey, which is directly to the south of Ajaria.

But how on earth had the Rodham brothers ever heard of Ajaria and its hazel forests? The reason turns out to be simple enough, say sources in Tbilisi. A few years ago Mr Abashidze's daughter Diana married an Italian-American called Marco Canistrale. He was encouraged to use his new family connections to go into business in Ajaria and it was he who, through friends in the US, first brought the potential of the Ajarian hazelnut industry to the attention of Hillary's brothers.

There was, of course, another reason for Abashidze to welcome the Rodhams with open arms: they were President Clinton's brothers-in-law. In Georgia, family links are the closest of all bonds. The very presence of the Rodhams in Batumi looked like something close to US recognition of Ajarian independence. Just in case anybody missed the point there were little American flags on all the tables at the inaugural meeting on 26 August to kick off the hazelnut project. To cement the family link, Mr Abashidze then flew to Italy with the brothers for the christening of Diana and Marco's three-week-old baby Ricardo. Tony Rodham was the godfather.

The reaction in the Georgian capital was furious. President Shevardnadze appeared on television to demand that the hazelnut contract be stopped "because it harms the foreign policy of the US and because the Georgian opposition is using the contract for political ends". The Georgian leader angrily contacted Washington to find out what was going on.

An article appeared in The Washington Post revealing the Rodhams' trip to Ajaria and, citing a Georgian lobbyist in the US capital, claiming that Mr Abashidze was closely linked to a controversial Russian businessman called Grigori Loutchansky.

The White House was soon running for cover. The last thing it wanted was one more scandal about any shady associates of the Clinton family.

Hillary Clinton, in themidst of a senate election campaign, said she knew about her brothers' business trip to Georgia, but not what they were doing there there. Finally Sandy Berger, the National Security Adviser, became worried enough to call Tony Rodham by phone.

"He said he felt that because a business deal was being used to misconstrue our foreign policy, and because opposition figures were trying to take advantage of the business deal for their own political purposes, [the Rodham brothers] should disengage from the deal," an administration official was quoted as saying.

In fact the Rodhams never pulled out. By December they were back in Ajaria for a week. "They flew about in a helicopter to look at the country, saw their hazelnut plantation and met with ministers," said a local journalist. At the Argo Holdings' hazelnut processing plant on the outskirts of Batumi, where the nuts are shelled and sorted, a nervous local manager, his newly built office filled with US flags, last weekadmitted: "We will be in production by next September but I cannot tell you my name; it is a commercial secret." His reticence is understandable.

Mr Abashidze himself is much more open. He is still bemused by the continuing row over the hazelnut project, but he confirmed in an interview with The Independent that it is still going ahead. He says his government has $1m invested in the scheme. He is alternatively enraged and bemused by the criticism of Tony Rodham for becoming young Ricardo's godfather which, he said, gave the impression that his little grandson was a paid-up member of the mafia. "He was only 20 days old at the time," Mr Abashidze said with a laugh. "On the other hand if you have any enemies in Italy I am sure he could deal with them for you." What about his links to Mr Loutchansky, described by the US press as his "economic adviser"? "I know Mr Loutchansky," said Mr Abashidze. "But a lot of people come to see me.

"Nobody invited him here. He is about as much my economic adviser as he is my space adviser or my military adviser." This partial denial is unlikely to reassure the White House.

Mr Abashidze probably did not realise that Mr Loutchansky's name was guaranteed to give the White House nightmares. President Clinton had already been criticised for consorting with controversial Russians after he was photographed shaking hands with Mr Loutchansky at a fundraiser in the US in 1993. Two years later Mr Loutchansky was unable to attend another fundraiser because the State Department refused to give him a visa to enter the country.

Mr Abashidze denies vehemently that he is "the leader of the east European mafia". But he refers to the toddler Ricardo, who races around the cavernous reception rooms in Abashidze's headquarters in a small electric car bleeping the horn, as "the Mafioso".

Tony and Hugh Rodham may still dream of becoming the hazelnut kings of the Caucasus, but they are unlikely to succeed against the combined opposition of the Georgian government and the White House.