5 reasons why the Clinton Foundation will be a 2016 campaign issue

5 reasons why the Clinton Foundation will be a 2016 campaign issue

The finances of the Clinton Foundation are now being closely examined by numerous media outlets and watchdog groups. With this increased scrutiny, the foundation could develop into a huge campaign issue dogging Hillary Clinton’s presidential campaign throughout 2016.

Republican presidential candidates can boil down the Clinton Foundation’s problems into three bumper sticker themes:

Hillary can’t be trusted, the IRS is corrupt, and the Clinton’s only rule is “there are no rules.”

With those themes in mind here is the background and supporting data.

It has been widely reported that the Clinton Foundation complied with the November 16 IRS deadline filing their 2014 Form 990 and financial statements. Along with those requirements, the foundation “voluntarily” filed amended 990 tax returns for 2013, 2012, 2011, and 2010.

In addition, its increasingly troubled spin-off organization, the Clinton Health Access Initiative (CHAI), filed amended returns from 2012 and 2013. This was after it was revealed by Reuters in April that CHAI and the umbrella Clinton Foundation returns had errors in how funds from foreign governments were reported.

Now that the returns are filed and the overworked accounting teams are taking a much needed break, it is time for the rest of us to move on because there is nothing to see. That is according to this Letter from Clinton Foundation President Donna E. Shalala to Supporters posted on the Foundation website.

But, as with all things Clinton, there are always more questions than answers because normal rules, laws and regulations never seem to apply. Most assuredly, if the IRS were not corrupt to the core, and if President Obama were not so embarrassed that while she served as his secretary of state, Mrs. Clinton’s family foundation collected $20 million in donations from foreign governments (and did not separate out those donations as required) – there would be at least five red flags raised by these filings.

It all starts with the overarching question, “Why the Clinton Foundation, with over $332 million in 2014 assets — now “voluntarily” refiling four years of tax returns — did not trigger an IRS audit months ago?”  No action from the IRS speaks volumes about the power of the Clinton name and the current state of our politicized IRS that is deliberately choosing to ignore these five red flags.

First Red Flag: Vast differences between the Form 990 and the financial statements

Key financial data concerning “The Bill, Hillary, and Chelsea Clinton Foundation” as stated in the Form 990 for 2014  (supposedly for the entire Foundation) differs materially from the data in the “consolidated” operations of the entire Foundation audited by the respected accounting firm of PricewaterhouseCoopers (PwC).

For example, total revenues in the Form 990 for 2014 are $177.8 million, whereas in the audit they are $337.9 million. Program service expenses are $72.5 million in the Form 990, but $217.7 million in the audit.

Total foundation expenses are $91.2 million in the Form 990 but a whopping $249.5 million in the audit. These discrepancies are only the beginning of what Charles Ortel (more on him later) says are, “completely fraudulent financial statements and 990 returns.”

Second Red Flag: Percentage of revenue spent on actual charitable programs

If refiling years of amended returns were not enough to capture the IRS’s attention, how about the percentage of revenue raised compared to the amount spent on charitable programs? (This is the reason the IRS grants any foundation its tax-exempt status.) So with that in mind, let’s examine some intriguing Clinton Foundation numbers.

In 2014 the Clinton Foundation raised $177.8 million, while Hillary Clinton, a foundation director was “deciding” to run for president. As mentioned above they state their Form 990 program expenses as $72.5 million. Of that, only $5.1 million went to third parties for domestic and foreign program grants which translates into only 7.1% of total program expenses.

The largest listed program expense was salary, wages and compensation at $19.6 million. Second largest was conferences, conventions and meetings at $12.3 million. Travel was third at $6 million. Given that the foundation’s total expenses on the 2014 Form 990 were $91.1 million, means that the $5.1 million spent on grant programs doing actual charity work, translates into only 5.6% of total foundation expenses.

However, as stated in the first red flag, the PwC audit lists just under $250 million as total foundation expenses. Therefore, the real percentage spent on charity programs is more like 2%. What these confusing numbers really mean is all the Clinton Foundation and spin-off organizations are a tangled mess. This is Clinton “business as usual” with convoluted foundation “accounting” validating their slush fund — which in turn pays for their royal lifestyle and secures future political power.

It gets even better because in foundation president Shalala’s previously mentioned “letter to supporters” which accompanies the financial statements and Form 990 she writes, “Approximately 80% of our spending went to fulfilling our programmatic work.” Of course what the Clinton Foundation characterizes as “programmatic work” depends on the Clintonian definition of programmatic work.

Third Red Flag: Conflict of interest by the firm that conducted the foundation’s external review

Also within Donna Shalala’s happy letter, she sings the praises of Kathy Keneally, a top tax litigation lawyer with the firm DLA Piper who led the foundation’s external review. (Aside from PricewaterhouseCoopers’ audit.)  And surprise! –Shalala states that, “Our external tax reviewers informed us that the errors (in past returns) did not require us to amend our returns.”

What Shalala neglects to reveal is DLA Piper has contributed between $50,001 and $100,000 to the Clinton Foundation. Also, failing to pass the smell test is that DLA Piper’s employees so far have contributed $171,200 to Hillary Clinton’s 2016 presidential campaign. These employees still have some catching up to do with DLA Piper employees in 2008 who contributed a total of $496,700 to Clinton’s 2008 presidential campaign. No conflict of interest here so move on.

Fourth Red Flag: Clinton Foundation has a $150 million endowment managed by Chelsea’s best friend with close family ties

The Clinton Foundation’s 2014 financial statement includes $150.6 in “permanently restricted funds.” That is the amount in the endowment fund at the end of 2014 that should be officially renamed the “Clinton Family Retirement & Slush Fund.”

A footnote on the endowment fund says, “In furtherance of its mission, the overall goal of the Foundation’s Endowment is to provide a stable source of financial support and liquidity for the  mission of the Foundation.”  By now it has become clear that the real mission of the Foundation is laundering money donated by friends and cronies to further the political goals of Clinton, Inc.

For the record, the endowment is managed by Summit Rock Advisors where Chelsea Clinton’s best friend, Nicole Davison Fox just happens to be managing director. Keeping it tidy is Nicole’s husband, Michael Fox who, along with Chelsea’s husband Marc Mezvinsky, was a founding partner at Eaglevale Partners, a once troubled hedge fund, where both are still employed. The good news for these young “one-percenters” is in 2015, Eaglevale rebounded as a result of successful foreign currency bets with investor clients like Goldman Sachs Group, Chief Executive Officer Lloyd Blankfein.

One can only imagine the conversation at family dinners after Mrs. Clinton has been out on the campaign trail railing against Wall Street greed. Furthermore, when you consider this $150 million endowment collected tax-free and managed by a close friend with family ties, you know there is absolutely no reason why the IRS would want to peek under the tent.

At this writing the website of Summit Rock Advisors is black, literally — only displaying their logo and a tiny “contact us” link to a form. No visitors are allowed to poke around and learn the investing philosophy of Summit-Rock Advisors.

Fifth Red Flag: IRS and government regulators meet Charles Ortel who has done your work

Our final red flag is a treasure trove of data compiled on the website of Charles Ortel, a respected Wall Street analyst, and all the IRS has to do is point, click and scroll.

Since February of this year, Ortel has documented, in excruciating detail, how the Clinton Foundation seems to have committed fraud in all 50 states and across the globe with tentacles growing daily.  (Drudge has breaking news on this latest Clinton scam.)

Ortel strongly suggests that PricewaterhouseCoopers, the large respected firm that signed the Clinton Foundation Form 990s in 2013 and 2014, is complicit in perpetrating this fraud. He even believes that as a result of the Clinton Foundation “audits,” PwC could be brought down like the accounting firm of Arthur Andersen after they famously cooked Enron’s fraudulent books.

After PwC prepared the 2013 Form 990s, Ortel “put them on notice that their returns were fraudulent” and was ignored. Now that the 2014 returns are public and even with PwC amending the 2013 returns, Ortel is preparing to send a detailed report to the Public Company Accounting Oversight Board (PCAOB). This is the organization that oversees “the auditors of companies to protect investors.” Ortel told me that the “PCAOB will be very interested in his findings about PwC’s 2013 and 2014 returns and financial statements for the Clinton Foundation.”

Additionally, Ortel says that “to ensure that no outsider can track the Clinton Foundation confusion of inflows and outflows that occurred in many different currencies, no meaningful information whatsoever is provided concerning translation rates for foreign currencies into and out of U.S. dollars.”

Fortunately, on November 18, Ortel’s extensive work caught the eye of Judicial Watch with a piece headlined, “Clinton Finances: White House or Big House.” Judicial Watch’s “Investigative Bulletin” calls Ortel’s work, “encyclopedic” and also draws heavily from Ken Silverstein’s detailed reporting in Harper’s with his piece headlined, “Shaky Foundations.” Silverstein also utilizes Ortel’s research as a primary source.

Ortel told me that “really big things are happening” as a result of his Clinton Foundation research. Therefore, all signs point to the Clinton Foundation becoming a 2016 campaign issue for Republicans to use against Hillary Clinton in her quest for the White House.

However, given all the complicated financial detail and IRS red flags, in order for the Clinton Foundation corruption to be translated into effective Republican campaign messaging it is imperative that the three bumper sticker themes mentioned at the beginning — Hillary can’t be trusted, the IRS is corrupt, and the Clinton’s only rule is “there are no rules” — are pounded into the brains of voters.

Otherwise, the entire Clinton Foundation scandal becomes one big yawn and another excuse for the Clintons to repeat their mantra that Republicans “are out to get them.”

Cross-posted at RedState

Myra Kahn Adams

Myra Kahn Adams

Myra Kahn Adams is a media producer and political writer. She was on the 2004 Bush campaign's creative team and the 2008 McCain campaign's ad council. Writing credits include, National Review, Washington Examiner, World Net Daily, Breitbart and many others. Contact Myra at MyraAdams01@gmail.com


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