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Why The IRS Is Also Investigating The Clinton Foundation

- November 3, 2016

Separate From The FBI’s Ongoing Investigation Into Official Corruption At The Organization, The IRS Is Also Looking Into Whether The Foundation Was Used For Personal Enrichment


TOP TAKEAWAYS

  • Today, a news report noted that the IRS has an ongoing investigation into the Clinton Foundation tax-exempt status following accusations that the non-profit is being used for personal enrichment.
  • Recent weeks have exposed red flags like Doug Band’s memo outlining “Bill Clinton Inc.,” and Chelsea Clinton’s demand for an audit to protect the group’s tax exempt status and prevent the “hustling” occurring at the foundation.
  • The Clintons’ have used their foundation for exorbitant and lavish travel spending for their freinds and themselves.
  • The Clinton Foundation continues to be investigated by the FBI for public corruption, a probe which has gone on for more than a year and has ensnared Democrat Virginia Governor and ex-foundation board member Terry McAuliffe, a longtime political associate of the Clintons.

THE CLINTON FOUNDATION IS UNDER INVESTIGATION FROM THE IRS FOR USING A NONPROFIT GROUP FOR PERSONAL ENRICHMENT OR AS THE IRS CALLS IT “INUREMENT”

The IRS’ Tax Exempt And Government Entities Division Is Reviewing The Tax Status Of The Bill, Hillary And Chelsea Clinton Foundation. “The Earle Cabell Federal Building in downtown Dallas is an all purpose office complex, a bastion of federal bureaucracy located at 1100 Commerce St. Most people come for a passport or to get business done in front of a federal judge. But inside, a quiet review is underway that has direct ties to the raging presidential election: The local branch of the IRS' Tax Exempt and Government Entities Division is reviewing the tax status of the Bill, Hillary and Chelsea Clinton Foundation.” (Joe Pallalardo, “The Dallas IRS Office That’s Quietly Determining The Fate of The Clinton Foundation,” The Dallas Observer, 11/2/16)

  • The IRS Review Is Separate From The Department Of Justice Probes Into The Foundation. “This IRS review has not generated similar waves as Department of Justice probes into the foundation, and has largely been forgotten in the campaign's melee. It's just not as sexy as private email servers, FBI infighting and charges of political pressure applied to law enforcement.” (Joe Pallalardo, “The Dallas IRS Office That’s Quietly Determining The Fate of The Clinton Foundation,” The Dallas Observer, 11/2/16)

The IRS Is Looking To See If The Clintons Traded Money For Preferential Treatment And Personal Enrichment. That’s an eye-catcher for the TE/GE folks looking for specific examples of inurement. Instead of money changing hands, the IRS is looking to see if the Clintons traded money for preferential treatment.” (Joe Pallalardo, “The Dallas IRS Office That’s Quietly Determining The Fate of The Clinton Foundation,” The Dallas Observer, 11/2/16)

“Using A Nonprofit Group For Personal Enrichment — Called Inurement — Is One Sure-Fire Way To Gain IRS Scrutiny.” (Joe Pallalardo, “The Dallas IRS Office That’s Quietly Determining The Fate of The Clinton Foundation,” The Dallas Observer, 11/2/16)

  • The IRS Says A Charitable Organization “Must Not Be Organized Or Operated For The Benefit Of Private Interests, Such As the Creator Or The Creator’s Family…” “A section 501(c)(3) organization must not be organized or operated for the benefit of private interests, such as the creator or the creator's family, shareholders of the organization, other designated individuals, or persons controlled directly or indirectly by such private interests. No part of the net earnings of a section 501(c)(3) organization may inure to the benefit of any private shareholder or individual. A private shareholder or individual is a person having a personal and private interest in the activities of the organization.” (“Inurement/Private Benefit – Charitable Organizations,” IRS, Accessed 11/3/16)

The IRS Review Started More Than Four Months Ago. “But even though this examination is less scrutinized and is harder to conceptualize, it's impact may be important. The report won't likely be done in time to influence the presidential campaign — even though the review started more than four months ago — but it could certainly influence the first term of a Hillary Clinton presidency. As with anything tax related, the status of the foundation may be determined using rules few understand. And that makes understanding the work at 1100 Commerce St. in Dallas that much more important. In Washington, D.C., many things start with words printed on congressional letterhead. Earlier this year, 64 GOP members of Congress asked the IRS to investigate why the foundation can keep its nonprofit status. The letter includes ‘media reports’ claiming pay-to-play relationships between former President Bill Clinton, who received large speaking fees, and decisions made by Hillary Clinton to approve choices that benefited foundation donors. The sources of these reports range from The New York Times to hit-piece investigative books. In July, the IRS sent letters back to the Congress informing members the review had begun. The letter also noted that the Tax Exempt and Government Entities Division (TE/GE) office in Dallas would be conducting the review.” (Joe Pallalardo, “The Dallas IRS Office That’s Quietly Determining The Fate of The Clinton Foundation,” The Dallas Observer, 11/2/16)

If The Board Of Directors “Knew Of The Abuses, They Too Could Be Violating The Law.” “Spending money on staff salaries and lavish events are common nonprofit pitfalls. If the board of directors knew of the abuses, they too could be violating the law.” (Joe Pallalardo, “The Dallas IRS Office That’s Quietly Determining The Fate of The Clinton Foundation,” The Dallas Observer, 11/2/16)

  • Chelsea And Bill Clinton Currently Sit On The Clinton Foundation Board. “Chelsea Clinton, Vice Chair of the Clinton Foundation, works to drive the vision and work of the Clinton Foundation. Chelsea previously worked at McKinsey & Company and Avenue Capital. Chelsea serves on the boards of the Clinton Health Access Initiative, the School of American Ballet, the Africa Center and the Weill Cornell Medical College. She is also co-chair of the Advisory Board for the Of Many Institute at New York University. Chelsea holds a B.A. from Stanford, a MPhil from Oxford, a MPH from Columbia’s Mailman School of Public Health, and a Doctorate in International Relations from Oxford University. She, her husband Marc, their daughter Charlotte, and their son Aidan live in New York City. William Jefferson Clinton was the first Democratic president in six decades to be elected twice – first in 1992 and then in 1996. Under his leadership, the country enjoyed the strongest economy in a generation and the longest economic expansion in U.S. history, including the creation of more than 22 million jobs. After leaving the White House, President Clinton established the Clinton Foundation. Today, the Foundation works to improve global health and wellness, increase opportunity for girls and women, reduce childhood obesity, create economic opportunity and growth, and help communities address the effects of climate change. In addition to his Foundation work, President Clinton has served as the top United Nations envoy for the Indian Ocean tsunami recovery effort and as the UN Special Envoy to Haiti. Today, the Clinton Foundation is supporting economic growth, capacity building, and education in Haiti. President Clinton was born on August 19, 1946, in Hope, Arkansas. He and his wife Secretary of State Hillary Rodham Clinton have one daughter, Chelsea, and live in Chappaqua, New York.”  (Clinton Foundation, Accessed 11/3/16)
  • Hillary Clinton Previously Sat On The Clinton Foundation Board. “Hillary Rodham Clinton told staff members at the Clinton Foundation that she was stepping down from the board in order to run for president, according to an internal email. ‘While I have cherished my time serving on the board and engaging in the day-to-day work of the Foundation, in order to devote myself to this new, all-encompassing endeavor, I have resigned from the board of directors effective today,’ Mrs. Clinton wrote in the email, which was sent about 90 minutes after her announcement video was posted.” (Maggie Haberman, “Hillary Clinton Resigns From Board Of Clinton Foundation,” The New York Times, 4/12/15)

In 2011 Chelsea Clinton Demanded A Review Of The Foundation Because Of Fears They Would Lose Their Tax Exempt Status

WikiLeaks Revealed That “Chelsea Clinton Ordered An Audit Of The Foundation” Because She Was Concerned About Reported “Conflicts” With Donors “Whom May Have An Expectation Of Quid Pro Quo Benefits In Return For Gifts.” “Clinton and her staff have consistently denied any conflicts of interest or improper enrichment and cite reporting holes in the media stories and books claiming pay-to-play relationships. But since July, more information has been revealed, via hacked email correspondences of Clinton adviser John Podesta released by Wikileaks. The emails reveal that Chelsea Clinton ordered an audit of the foundation and ‘some interviewees reported conflicts of those raising funds or donors, some of whom may have an expectation of quid pro quo benefits in return for gifts.’” (Joe Pallalardo, “The Dallas IRS Office That’s Quietly Determining The Fate of The Clinton Foundation,” The Dallas Observer, 11/2/16)

Chelsea Was “Alarmed” About The “Blurring Of The Lines Between The Foundation’s Philanthropic Activities And Some Of its Leaders’ Business Interests.” “Chelsea Clinton was alarmed. During a 2011 trip to London representing her family’s foundation, she got wind that people close to her father, Bill Clinton, had been lobbying members of Parliament for their own consulting clients, telling the officials they were calling ‘on behalf of President Clinton.’ People she ran into whispered that the practice reminded them of former Prime Minister Tony Blair’s sneered-upon post-Downing Street moneymaking ventures, a comparison that she said ‘would horrify my father,’ who had no idea his name was being used. It was an eye-opening moment for Ms. Clinton, the only child of America’s most famous political power couple, who was making a new name for herself as a defender of her father’s legacy and, by extension, of her mother’s coming second presidential campaign. Her comments about her father’s aides were revealed in the thousands of emails obtained by hackers and released by WikiLeaks over the past month. In addition to showing the internal strategizing, sniping and off-the-cuff commentary within Hillary Clinton’s inner circle, the emails paint an unexpectedly detailed portrait of Mrs. Clinton’s guarded and private daughter as she set about her goal, as she explained in one email, of ‘protecting my father and the nonprofit status of the foundation.’ Ms Ms. Clinton asserted herself at the Clinton Foundation, eager to embrace her role as a board member and de facto heir, she became concerned about what seemed to her to be a lack of professionalism, as well as a blurring of the lines between the foundation’s philanthropic activities and some of its leaders’ business interests.” (Amy Chozick, “Chelsea Clinton’s Frustrations And Devotions Shown In Hacked Emails,” The New York Times, 10/27/16)

Chelsea Wanted An “Audit” Of The Foundation Because She Was Thought That “Teneo’s Principals Had Been ‘Hustling’ Business At Foundation Gatherings.” “Ms. Clinton had already started to fret about the intermingling of foundation business with Teneo, the corporate consulting firm co-founded by Douglas J. Band, one of her father’s closest aides. She suggested an audit of the charity and wrote that she was concerned that Teneo’s principals had been ‘hustling’ business at foundation gatherings.” (Amy Chozick, “Chelsea Clinton’s Frustrations And Devotions Shown In Hacked Emails,” The New York Times, 10/27/16)

THE CLINTON FOUNDATION IS ALREADY WRAPPED UP IN PAY-TO-PLAY CONTROVERSY

Doug Band’s “Bill Clinton Inc.” Memo Is Raising Red Flags For The IRS

The Bill Clinton Inc. Memo From Doug Band Is A “Bad Move” For “Anyone Involved In A Nonprofit Group.”  “Given this language, citing ‘gifts’ and ‘quid pro quo benefits’ in emails is a pretty bad move for anyone involved in a nonprofit group. Another bad move: When senior Clinton advisers like Doug Bland call the intersection of the foundation fundraising and the former president’s personal activities ‘Bill Clinton Inc.’” (Joe Pallalardo, “The Dallas IRS Office That’s Quietly Determining The Fate of The Clinton Foundation,” The Dallas Observer, 11/2/16)

In The Memo, Clinton Aide Doug Band Detailed “A Circle Of Enrichment In Which He Raised Money For The Clinton Foundation, While Pressing Many Of Those Same Donors To Provide Personal Income To The Former President.” “In doing so, Band also detailed a circle of enrichment in which he raised money for the Clinton Foundation from top-tier corporations such as Dow Chemical and Coca-Cola that were clients of his firm, Teneo, while pressing many of those same donors to provide personal income to the former president.” (Rosalind Helderman and Tom Hamburger, “Inside ‘Bill Clinton Inc,’: Hacked Memo Reveals Intersection Of Charity And Personal Income,” The Washington Post, 10/26/16)

Band’s Memo “Lays Out The Aggressive Strategy Behind Lining Up The Consulting Contracts And Paid Speaking Engagements For Bill Clinton That Added Tens Of Millions Of Dollars To The Family’s Fortune, Including During The Years That Hillary Clinton Led The State Department.” “The memo, made public Wednesday by the anti-secrecy group WikiLeaks, lays out the aggressive strategy behind lining up the consulting contracts and paid speaking engagements for Bill Clinton that added tens of millions of dollars to the family’s fortune, including during the years that Hillary Clinton led the State Department. It describes how Band helped run what he called ‘Bill Clinton Inc.,’ obtaining ‘in-kind services for the President and his family — for personal travel, hospitality, vacation and the like.’” (Rosalind Helderman and Tom Hamburger, “Inside ‘Bill Clinton Inc,’: Hacked Memo Reveals Intersection Of Charity And Personal Income,” The Washington Post, 10/26/16)

  • Band Detailed How He Combined His Private Sector Teneo Work With CGI Work, Saying He Would Use A Hotel Room Above The CGI Meeting To Meet With Business Clients. “Band described in the memo how he combined his work for CGI and Teneo. He wrote that he had used a hotel room upstairs from the 2011 CGI gathering to meet with Teneo clients. He also acknowledged giving free CGI memberships to ‘target Teneo clients’ being cultivated as potential foundation donors. Memberships generally cost $20,000 a year.” (Rosalind Helderman and Tom Hamburger, “Inside ‘Bill Clinton Inc,’: Hacked Memo Reveals Intersection Of Charity And Personal Income,” The Washington Post, 10/26/16)

Doug Band Bragged That He “Secured Contracts For The Former President That Would Pay Up $66 Million Over The Subsequent Nine Years…” “Band wrote that Teneo partners had raised in excess of $8 million for the foundation and $3 million in paid speaking fees for Bill Clinton. He said he had secured contracts for the former president that would pay out $66 million over the subsequent nine years if the deals remained in place.” (Rosalind Helderman and Tom Hamburger, “Inside ‘Bill Clinton Inc,’: Hacked Memo Reveals Intersection Of Charity And Personal Income,” The Washington Post, 10/26/16)

Chelsea Wanted Equity In Teneo Because She Saw Teneo “As Selling Access To Her Father.“All was well until an early meeting with Bill; when Band arrived, he was surprised to find Chelsea and her husband in the room. According to Halper, the couple wanted not just equity in Teneo but a salary for Chelsea. She saw Band — not inaccurately — as selling access to her father.” (Maureen Callahan, “How A ‘Weird’ Chelsea Clinton Is Getting In On The Family Business,” The New York Post, 7/24/14)

The FBI Is Investigating The Clinton Foundation For Giving Donors Special Treatment At Hillary’s State Department

The FBI’s Public-Corruption Prosecutors’ Continuing Investigation Into The Foundation Is Broadly Centered On Whether “Clinton Foundation Contributors Received Favorable Treatment From The State Department Under Hillary Clinton.” “Starting in February and continuing today, investigators from the Federal Bureau of Investigation and public-corruption prosecutors became increasingly frustrated with each other, as often happens within and between departments. At the center of the tension stood the U.S. attorney for Brooklyn, Robert Capers, who some at the FBI came to view as exacerbating the problems by telling each side what it wanted to hear, these people said. Through a spokeswoman, Mr. Capers declined to comment. The roots of the dispute lie in a disagreement over the strength of the case, these people said, which broadly centered on whether Clinton Foundation contributors received favorable treatment from the State Department under Hillary Clinton.” (Devlin Barrett and Christopher M. Matthews, “Secret Recordings Fued In Clinton Probe,” The Wall Street Journal, 11/2/16)

At The FBI There Was “Frustrations” Among Investigators “Who Viewed FBI Leadership As Uninterested In Probing The Charity…” “That led to frustrations among some investigators, who viewed FBI leadership as uninterested in probing the charity, these people said.” (Devlin Barrett, “FBI In Internal Feud Over Hillary Clinton Probe,” The Wall Street Journal, 10/30/16)

Agents Investigating The Foundation Were Told To “Limit Their Pursuit Of The Case.” “New details show that senior law-enforcement officials repeatedly voiced skepticism of the strength of the evidence in that probe, sought to condense what was at times a sprawling cross-country effort, and, according to some people familiar with the matter, told agents to limit their pursuit of the case.” (Devlin Barrett, “FBI In Internal Feud Over Hillary Clinton Probe,” The Wall Street Journal, 10/30/16)

The Journal Reported That The FBI Presented Their Evidence To The Justice Department In February Of 2016. “In February, FBI officials made a presentation to the Justice Department, according to these people. By all accounts, the meeting didn’t go well. Some said that is because the FBI didn’t present compelling evidence to justify more aggressive pursuit of the Clinton Foundation, and that the career public integrity prosecutors in the room simply believed it wasn’t a very strong case. Others said that from the start, the Justice Department officials were stern, icy and dismissive of the case.” (Devlin Barrett, “FBI In Internal Feud Over Hillary Clinton Probe,” The Wall Street Journal, 10/30/16)

Four FBI Field Offices “Were Collecting Information About The Clinton Foundation To See If There Was Evidence Of Financial Crimes Or Influence-Peddling, According To People Familiar With The Matter.” “Early this year, four FBI field offices—New York, Los Angeles, Washington and Little Rock, Ark.—were collecting information about the Clinton Foundation to see if there was evidence of financial crimes or influence-peddling, according to people familiar with the matter.” (Devlin Barrett, “FBI In Internal Feud Over Hillary Clinton Probe,” The Wall Street Journal, 10/30/16)

  • The Los Angeles FBI Field Office “Had Picked Up Information About The Clinton Foundation In An Unrelated Public Corruption Case And Had Issued Some Subpoenas For Bank Records Related To The Foundation…” “Los Angeles agents had picked up information about the Clinton Foundation from an unrelated public corruption case and had issued some subpoenas for bank records related to the foundation, these people said.” (Devlin Barrett, “FBI In Internal Feud Over Hillary Clinton Probe,” The Wall Street Journal, 10/30/16)
  • The Washington FBI Field Office “Was Probing Financial Relationships Involving Mr. McAuliffe Before He Became A Clinton Foundation Board Member…” “The Washington field office was probing financial relationships involving Mr. McAuliffe before he became a Clinton Foundation board member, these people said. Mr. McAuliffe has denied any wrongdoing, and his lawyer has said the probe is focused on whether he failed to register as an agent of a foreign entity.” (Devlin Barrett, “FBI In Internal Feud Over Hillary Clinton Probe,” The Wall Street Journal, 10/30/16)
  • The New York FBI Field Office “Had Done The Most Work On The Clinton Foundation Case And Received Help From The FBI Field Office In Little Rock…” “The FBI field office in New York had done the most work on the Clinton Foundation case and received help from the FBI field office in Little Rock, the people familiar with the matter said.” (Devlin Barrett, “FBI In Internal Feud Over Hillary Clinton Probe,” The Wall Street Journal, 10/30/16)

THE CLINTON’S HAVE USED THE FOUNDATION TO TRAVEL FIRST CLASS AROUND THE WORLD MIXING FOUNDATION BUSINESS WITH POLITICS AND FOR-PROFIT ACTIVITIES

The New York Post Headline: “Bill Clinton Foundation Has Spent More Than $50 Million On Travel Expenses” (Geoff Earle, “Bill Clinton Foundation Has Spent More Than $50 Million On Travel Expenses,” New York Post, 8/20/13)

From 2003 To 2012, The Clinton Foundation Spent More Than $50 Million On Travel. “Bill Clinton’s foundation has spent more than $50 million on travel expenses since 2003, an analysis of the non-profit’s tax forms reveal.” (Geoff Earle, “Bill Clinton Foundation Has Spent More Than $50 Million On Travel Expenses,” New York Post, 8/20/13)

In Just 2011, The Clinton Associated Foundations Spent $12.1 Million On Travel. “The web of foundations run by the former president spent an eye-opening $12.1 million on travel in 2011 alone, according to an internal audit conducted by foundation accountants. That’s enough to by 12,000 air tickets costing $1,000 each, or 33 air tickets each day of the year.” (Geoff Earle, “Bill Clinton Foundation Has Spent More Than $50M On Travel Expenses,” New York Post, 8/20/13)

Bill Clinton Used The Clinton Foundation To Pay For Travel That Blurred The Lines Between Foundation Activities And Personal Profit

Bill Clinton’s Trips Accounted For 10 Percent Of The Overall Travel Expenses In 2011, Meaning That The Foundation Paid More Than $1 Million For Bill’s Travel That Year. “According to previously undisclosed data provided by the Clinton Foundation, presidential trips accounted for 13 percent of the 2010 travel budget and 10 percent of the 2011 travel budget. That puts Bill Clinton’s single-year travel tab for 2011 at more than $1 million. A foundation official wouldn’t say how many presidential trips occurred in that time frame.” (Geoff Earle, “Bill Clinton Foundation Has Spent More Than $50 Million On Travel Expenses,” New York Post, 8/20/13)

According To Clinton Foundation Spokesman Ben Yarrow, Bill Clinton’s Trips Typically Mix Clinton Foundation Work And Paid Events. “‘President Clinton travels on both private and commercial aircraft, including Mr. Giustra's,’ [Ben] Yarrow said. ‘When President Clinton travels, his trips typically include multiple activities: foundation related, paid speeches, official, etc.’” (Elliot Blair Smith, “Clinton Used Giustra’s Plane, Opened Doors For Deals, Bloomberg, 2/22/08)

Bill Clinton’s Spokesman Said Clinton’s Staff Purposefully Tries To Include As Many Political Events, Paid Speeches, And Foundation Events Into One Trip. “[Jay] Carson said Clinton's staff constructs his schedule to pack as much charitable work as possible -- along with political events helpful to Democrats -- around his for-profit speaking career. ‘We take a look at the schedule and say, All right, he has to be in this place for that paid speech. There are these three or four great things we've been meaning to do in this place. Let's do them,’ Carson said.” (John Solomon and Matthew Mosk, “For Clinton, New Wealth In Speeches,” The Washington Post, 2/23/07)

On A 2006 Trip To Asia For Charitable Work Helping Tsunami And Aids Victims, Clinton Tacked On Three Days Of Paid Speaking Engagements That Earned Him $750,000. “Likewise, in February 2006, Clinton headed to Asia for charitable work to help tsunami and AIDS victims. At the last minute, the State Department asked him to squeeze in a visit to Pakistan, helping ease tensions among Muslims angered by political cartoons they considered insulting. He then tacked on three days of paid engagements in Australia and New Zealand that earned him about $750,000.” (John Solomon and Matthew Mosk, “For Clinton, New Wealth In Speeches,” The Washington Post, 2/23/07)

THIS ISN’T THE FIRST TIME THE FOUNDATION HAS HAD ISSUES WITH THE IRS

The Foundation Has Been Forced To Refile Their Tax Returns For Several Years After Falsely Declaring Zero Foreign Government Dollars Flowing Into The Organization

CNN Headline: “Clinton Foundation: ‘Yes, We Made Mistakes’” (Dan Merica and Theodore Schleifer, “Clinton Foundation: ‘Yes, We Made Mistakes,’” CNN, 4/27/15)

CHAI Spokeswoman Maura Daley Conceded That The Organization Made Errors In Reporting The Amounts Of Government Grants In Its 2012 And 2013 Tax Filings. “An April 2015 Reuters story reported that Clinton Health Access Initiative spokeswoman Maura Daley conceded that the nonprofit organization made errors reporting the amounts of government grants on its 2012 and 2013 tax filings and said the group planned to refile those returns with the Internal Revenue Service … However, in a recent exchange with POLITICO, Daley denied the initiative ever committed to refiling and said no revised forms are being prepared.” (Johnathan Allen, “Republicans Ask IRS To Audit Clinton’s Charity Finances,” Reuters, 11/4/15)

After Being Caught, Clinton’s Charities Stated They Would Refile At Least Five Tax Returns After Errors Were Found “In How They Reported Donations From Governments” And More Audits On Other Clinton Foundation Returns May Come. “Hillary Clinton’s family’s charities are refiling at least five annual tax returns after a Reuters review found errors in how they reported donations from governments, and said they may audit other Clinton Foundation returns in case of other errors.” (Jonathan Allen, “Exclusive: Clinton Charities Will Refile Tax Returns, Audit For Other Errors,” Reuters, 4/23/15)

  • “The Charities’ Errors Generally Take The Form Of Under-Reporting Or Over-Reporting, By Millions Of Dollars, Donations From Foreign Governments, Or In Other Instances Omitting To Break Out Government Donations Entirely…” “The charities’ errors generally take the form of under-reporting or over-reporting, by millions of dollars, donations from foreign governments, or in other instances omitting to break out government donations entirely when reporting revenue, the charities confirmed to Reuters.” (Jonathan Allen, “Exclusive: Clinton Charities Will Refile Tax Returns, Audit For Other Errors,” Reuters, 4/23/15)
  • “For Three Years In A Row Beginning In 2010, The Clinton Foundation Reported To The IRS That It Received Zero In Funds From Foreign And U.S. Governments…” “For three years in a row beginning in 2010, the Clinton Foundation reported to the IRS that it received zero in funds from foreign and U.S. governments, a dramatic fall-off from the tens of millions of dollars in foreign government contributions reported in preceding years.” (Jonathan Allen, “Exclusive: Clinton Charities Will Refile Tax Returns, Audit For Other Errors,” Reuters, 4/23/15)

These Failures Make CHAI “A Prominent Symbol Of The Broken Political Promise And Subsequent Lack Of Accountability Underlying The Charity-Related Controversies That Are Dogging Clinton As She Embarks On Her Campaign For President.” “The failures make the Clinton Health Access Initiative, which is headquartered on Dorchester Avenue in South Boston, and goes by the acronym CHAI, a prominent symbol of the broken political promise and subsequent lack of accountability underlying the charity-related controversies that are dogging Clinton as she embarks on her campaign for president.” (Annie Linskey, “Clinton Charity Never Provided Foreign Donor Data,” The Boston Globe, 4/30/15)

CHAI Has Not Disclosed A Complete List Of Donors, Including Foreign Governments, Since 2010, Violating Clinton’s Ethics Agreement. “But officials at the Clinton's charities told Reuters last month that key parts of the agreement were broken a year into her four-year tenure. No complete list of donors to Clinton charities has been published since 2010, and new donations from foreign governments were never submitted to the State Department for an ethics review.” (Jonathan Allen, “Clinton Foundation to limit donations from foreign governments,” Reuters, 3/19/14)

After Initially Claiming They Would Refile, CHAI Reverse Course, Refusing To Do So

In Spring 2015, The Clinton Health Access Initiative Said It Was Refiling Erroneous Tax Forms. “The Clinton Health Access Initiative (CHAI) originally said it was amending the forms, known as form 990s, after Reuters discovered the errors in the spring. (Johnathan Allen, “Republicans Ask IRS To Audit Clinton’s Charity Finances,” Reuters, 11/4/15)

  • Clinton Foundation CEO Maura Pally Wrote: “Yes, We Made Mistakes, As Many Organizations Of Our Size Do, But We Are Acting Quickly To Remedy Them…” “In a blog post out Sunday, Foundation acting CEO Maura Pally reaffirmed its commitment to transparency, but nevertheless said some errors had occurred. ‘Yes, we made mistakes, as many organizations of our size do, but we are acting quickly to remedy them, and have taken steps to ensure they don't happen in the future,’ Pally wrote.” (Dan Merica and Theodore Schleifer, “Clinton Foundation: ‘Yes, We Made Mistakes,’” CNN, 4/27/15)

In November 2015, CHAI “Decided Against Refiling” Despite Previously Admitted Reporting Errors. “This week, CHAI said it had decided against refiling … While it is not unusual for charities to refile a form 990 on occasion and that doing so is not evidence of wrongdoing, several tax experts told Reuters it was odd for a charity to make large mistakes several years in row. CHAI had previously refiled its 2010 and 2011 tax returns after over-reporting the amount it received from government grants by tens of millions of dollars.” (Johnathan Allen, “Republicans Ask IRS To Audit Clinton’s Charity Finances,” Reuters, 11/4/15)

The Announcement To Not Refile Contradicted A “Highly Publicized News Report” Which Revealed Filing Errors. “An organization spun off from the Clinton Foundation has no plans to refile its tax returns due to mistakes in prior years, an official said, contradicting a highly-publicized news report earlier this year.” (Josh Gerstein, “Clinton Foundation Spin-Off Won’t Refile Tax Returns,” Politico, 11/2/15)

Then, Amid Pressure, CHAI Reversed Course Again And Refiled

Then, Amid Pressure, CHAI Reversed Course And Agreed To Amend Its Tax Returns In November 2015. “The Bill, Hillary & Chelsea Clinton Foundation's flagship health project changed its mind again on Wednesday on the matter of its erroneous tax returns, saying it would refile them with the U.S. Internal Revenue Service after all.” (Jonathan Allen, “Clinton Charity, Under Pressure, Will Amend Tax Return Errors,” Reuters, 11/4/15)

Reuters Headline: “Clinton Charity, Under Pressure, Will Amend Tax Return Errors” (Jonathan Allen, “Clinton Charity, Under Pressure, Will Amend Tax Return Errors,” Reuters, 11/4/15)

The Foundation Has Also Failed To Update Its Original 1997 IRS Mandate

The Foundation’s Original IRS Mandate From 1997 Was Specifically To “Construct A Library, Maintain A Historical Site With Records, And Engage In Study And Research…It Did Not Indicate An Intent To Conduct Activities Outside Of The United States…” “The case against the Clinton Foundation is multifaceted. One common attack is that the foundation has overextended its original mandate. ‘The Foundation’s original application to the IRS in 1997 advised that it was formed to construct a library, maintain a historical site with records, and engage in study and research,’ said Tennessee Republican Rep. Marsha Blackburn in an email to the Observer. ‘It did not indicate an intent to conduct activities outside of the United States, which was on one of the codes included in the IRS ‘Application for Recognition for Exemption’ in effect at the time. This would appear to prohibit much of the overseas work the Foundation has performed.” (Joe Pallalardo, “The Dallas IRS Office That’s Quietly Determining The Fate of The Clinton Foundation,” The Dallas Observer, 11/2/16)

Since 1997 The Foundation Has Grown Overseas And Has Failed To “Update An Application To Include International Work…” “This overseas growth is true, but maybe not as damning as it sounds. Many charities shift focus over time, although most nonprofit groups will reach out to make sure the IRS has no problem with new international work. This is smart because the TE/GE folks have a slate of specific questions for the people handing over U.S. charity money to recipients in other countries, something tax wonks call ‘expenditure responsibility.’ Any charity would be wise to know the rules before diving in. The Clinton Foundation didn’t reapply for its status as a nonprofit group, but they haven’t run afoul of IRS laws governing distribution of charity money. ‘It’s not like they filed their application and then never told the IRS anything after that,’ Stoltz says. ‘The division reads the tax returns, it’s sort of like filling out a new application each year.’ So the failure to update an application to include international work is not a smoking gun of nonprofit malfeasance, but there are other places the foundation is more at risk.” (Joe Pallalardo, “The Dallas IRS Office That’s Quietly Determining The Fate of The Clinton Foundation,” The Dallas Observer, 11/2/16)

THE FBI IS ALSO INVESTIGATING FORMER FOUNDATION BOARD MEMBER VIRGINIA GOVERNOR TERRY MCAULIFFE

“Other Clinton-Connected Foundation Board Members Are Under Investigation” Like “Virginia Governor Terry McAuliffe.” “Still, other Clinton-connected foundation board members are under investigation, including one-time director and now Virginia Governor Terry McAuliffe. The organization is not a target, officials say, but the inquiry definitely does include his time on the board.” (Joe Pallalardo, “The Dallas IRS Office That’s Quietly Determining The Fate of The Clinton Foundation,” The Dallas Observer, 11/2/16)

Gov. Terry McAuliffe (D-VA) Is The Subject Of An FBI Investigation Dating Back To At Least Last Year Into Campaign Donations To His Gubernatorial Campaign. “Virginia Democratic Gov. Terry McAuliffe is the subject of an ongoing investigation by the FBI and prosecutors from the Justice Department's public integrity unit, U.S. officials briefed on the probe say. The investigation dates to at least last year and has focused, at least in part, on whether donations to his gubernatorial campaign violated the law, the officials said.” (Evan Perez, Shimon Prokupecz, and Pamela Brown, “Virginia Gov. Terry McAuliffe Under Federal Investigation For Campaign Contributions,” CNN, 5/23/16)

  • McAuliffe Said He And The Clinton’s Are “Best Friends” And That They Have Been “Family Friends” For Three Decades. VIRGINIA GOVRERNOR TERRY MCAULIFFE: “We’re best friends, I’ve been family friends with the Clinton’s for thirty years. It’s a great relationship, we vacationed together for years, we’re just very personal friends, and I wanna see her in the White House. And I’m just thinking, imagine her in the White House, Bill, and I’m still as governor. We can have a great year together, really getting a lot of assets, rightfully so, moved to the commonwealth because that’s where they should be. You should forget those other 49 states, I’m gonna try to convince her, everything should go to Virginia.” (Terry McAuliffe, Interview, 101.5 The Valley’s Music Place, 3/31/16)

McAuliffe’s Attorney’s Said The FBI Is Looking Into Whether The Current Virginia Governor Was Lobbying On Behalf Of Foreign Governments Illegally. “McAuliffe’s attorney has said investigators are looking at whether McAuliffe violated a little-known statute that regulates U.S. citizens’ lobbying on behalf of foreign governments.(Matt Zapotosky, Rosaline S. Helderman and Tom Hamburger, “FBI Agents Pressed Justice Unsuccessfully For Probe Of Clinton Foundation,” The Washington Post, 10/30/16)

McAuliffe Previously Headed The Clinton Foundation, And His Role At The Organization Was Once Part Of The FBI’s Investigation Into The Virginia Governor. “In the Washington field office, a half-mile away from headquarters, agents were told they could continue to work on a probe of Virginia Gov. Terry McAuliffe, but would have to discontinue what they viewed as relevant connected work on the Clinton Foundation. McAuliffe is a close ally of the Clintons and previously headed the Clinton Foundation.” (Evan Perez, Pamela Brown, Shimon Prokupecz And Scott Glover, “Turmoil In The FBI,” CNN, 11/2/16)

 


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