Clinton Foundation Must Restate All Tax Filings by 11/16; Were AIDS Drugs Used to Launder Money?

It's not only the FBI -- which is investigating her mishandling of classified files -- that has Hillary Clinton worried. The Clinton Foundation's financial skulduggery is also set to return to the spotlight. Ken Silverstein has the very interesting tale.

The Clinton Foundation has until November 16 to amend more than ten years’ worth of state, federal and foreign filings, but it’s going to be virtually impossible to do so without acknowledging that it has engaged in massive accounting fraud since its inception

...the [Clinton] foundation portrays itself as do-gooder nonprofit organization but a cursory look reveals questionable and incomplete disclosures of its activities and accounts, as well as incredible misspending of donor money, virtually since its inception...

...the problems appear set to catch up with the foundation (now formally known as the Bill, Hillary, & Chelsea Clinton Foundation), which has until November 16 to amend more than ten years’ worth of state, federal and foreign filings. According to Charles Ortel, a financial whistleblower, it will be difficult if not impossible for the foundation to amend its financial returns without acknowledging accounting fraud and admitting that it generated substantial private gain for directors, insiders and Clinton cronies, all of which is against the law under an IRS rule called inurement.

While inurement may sound obscure to the layman, it’s an ancient legal principle and the IRS is very clear that it is verboten. If you are familiar with it, it becomes immediately clear that Bill Clinton – and arguably Hillary and daughter Chelsea as family members and fellow Clinton Foundation trustees – could have big problems come November 16. So, too, could Clinton cronies like Ira Magaziner (see below) and Doug Band, a Clinton administration and former Foundation insider who subsequently became a founding partner of a bipartisan business swamp called Teneo Holdings...

...“It’s illegal to set up a foundation whose primary purpose is to create financial gain,” said Ortel – who helped expose massive financial fraud by GE, GM and AIG, thereby helping trigger the 2009 financial collapse...

“That’s bright line illegal.” (Ortel wrote an article at Breitbart.com earlier which showed how “associates of Bill and Hillary Clinton may have attempted to monetize their participation in Clinton family philanthropic activities.”)

Ortel, a former managing director of Dillon, Read & Co, said that under New York law tax authorities don’t have to show criminal intent to get convictions against foundation officials, they need only show that the foundation filed materially misleading financial information and kept fundraising nonetheless. "The essence of what a charity does is take your money and show you how they spend it,” he told me. “The Clinton Foundation takes your money and obscures how they spend it.” (Note that the Clinton Foundation only started disclosing its donors in 2008, in response to years of pressure.) ...

Foundation spokesman Craig Minassian did not reply to repeated requests for comment for this story.

Ortel is hardly alone in raising questions about the Clinton Foundation’s accounting practices. Earlier this year, the watchdog group Charity Navigator put the Clinton Foundation on its “watch list” of dubious non-profit groups and politely described its business practices as “atypical.” A New York Post story about the development noted that in 2013 the family’s foundation “took in more than $140 million in grants and pledges in…but spent just $9 million on direct aid...”

...Detailed information provided to me by Ortel – and which I carefully reviewed and confirmed -- shows that the Clinton Foundation has received more than $1 billion over the years to purchase HIV/AIDS drugs for poor people in Africa, Asia and elsewhere. The leading donors to the foundation to support this admirable goal include the Bill & Melinda Gates Foundation and UNITAID.

However, a unit set up to receive the money – the Clinton Foundation HIV/AIDS Initiative Inc., which was run by Ira Magaziner, a Clinton administration veteran with close ties to Hillary – clearly spent far, far less than it took in. In fact, the unit’s accounting methods and operating practices were so shoddy that its license was revoked by the state of Massachusetts, where it was headquartered.

Furthermore, the accounting firm that handled much of the paperwork, BKD, has been implicated in a variety of misconduct. For example, last year the Securities and Exchange Commission sanctioned BKD for “violating auditor independence rules when they prepared the financial statements of brokerage firms that were their audit clients,” according to this story...

...Last April, Clinton Foundation acting CEO Maura Pally acknowledged “mistakes” in its tax filings and promised they would be corrected by November 16.

The problem, Ortel says, is that filing correct returns is impossible for the Clinton Foundation without admitting to criminal felonies. “The foundation has never filed a legitimate, independently certified and complete audit of their financial statements since it was founded, as is required under state, federal and foreign law” he told me during one of multiple phone conversations. “The IRS has let them get away with serious fraud.”

In 2001, Bill helped set up the Clinton Foundation within weeks of leaving office – after surrendering his law licenses in January for lying under oath during the Monica Lewinsky investigation...

[But] the Foundation has perhaps outdone even this with its AIDS program... Since the early-2000s, the Clinton Foundation has taken in at least $1 billion in donations to fight AIDS ... [and] to make a long story short, there’s no way of knowing how much the Clinton Foundation HIV/AIDS Initiative Inc. spent to buy HIV/AIDS drugs because its accounting procedures were so inadequate, but it was a whole lot less than what it took in...

Simply compare what UNITAID donated to the Clinton Foundation between 2006 and 2009 (see last page at this link), and contrast it with the amount that the foundation claims it spent for all anti-AIDS drug purchases and you will discover numbers that that are difficult to reconcile with the law or common sense or simple human decency. To be fairly precise, UNITAID alone reported donations to the Clinton Foundation of about $341.5 million during that period while the Clinton Foundation claims it spent about $215.4 million.

The fact that that UNITAID apparently donated about $126 million more to the Clinton Foundation for anti-AIDS pharmaceuticals than the Clinton Foundation spent on them is alarming enough. And based on this analysis by Judicial Watch, that understates the magnitude of the problem dramatically...

...The general shadiness of the whole Clinton Foundations AIDS initiative may well explain why Sir Elton John turned down without explanation an award for fighting AIDS from Bill Clinton during the recent Clinton Global Initiative annual meeting in New York.

“Using a charity that exploits victims of AIDS for your personal gain and advancement puts you in the lower circles of hell, but New York and the IRS haven’t done anything to stop them,” Ortel said.

As they say on the real blogs, read the whole thing.


Hat tip: BadBlue News.