Time to Declare Clinton Foundation the Biggest Charity Fraud Ever

To the long list of excuses for explaining why a presumed frontrunner lost the 2016 presidential election, Hillary Clinton now adds “socialists” in the Democratic Party, who rejected her devotion to regulated capitalism.

As if?

Team Clinton needs to confess that its official song is Shaggy’s epic hit: “It wasn’t me,” and then look in the mirror and understand the obvious: Hillary lost (again) because very few Americans embrace suspicious, over-the-top living financed by crony capitalist payoffs (“speeches”) and charity frauds.

The former are easy to spot, but the latter are tougher to grasp, unless you study the laws and regulations of charities. Writing about the Clinton Foundation for The Atlantic in the October 2007 issue, Jonathan Rauch framed the obvious eight years ago in the title of his piece: “This Is Not Charity.”

Rauch was correct that in 2007 and in the years that presidents George W. Bush and Barack H. Obama were in the White House, the Clinton Foundation only expanded the scope and geographic extent of its unauthorized, uncontrolled, and illegal fundraising activities, all the while subsidizing the majestic lifestyles of political families with dynastic ambitions.

The time has finally come for the Trump administration to expose, indict and fully prosecute the Clintons and their multiple steadfast allies in what is arguably the largest charity fraud in American philanthropic history.

Why the Clinton Foundation is a charity fraud. Exhibits running many times through all letters in the English alphabet show plainly, to those who choose to look, that the organization using Federal Employer Identification Number 31-1580204 has operated as if it were above the law.

The organization began Oct. 23, 1997, as The William J. Clinton Presidential Foundation, and last changed its name to the Bill, Hillary & Chelsea Clinton Foundation on April 9, 2013. Along the way, there have been multiple related projects, including the Clinton Health Access Initiative (CHAI), Bush-Clinton Katrina Fund (BCKF), and Clinton Global Initiative (CGI).

A publicly supported charity like the Clinton Foundation can only serve the interests of the general public, and its trustees must ensure that the entity is lawfully formed and operated as an organization to further its specific purposes.

Related: The Clinton Foundation Borrowed $28.5 Million. Who Made It Disappear?

The only purposes enumerated in the Clinton Foundation's articles of incorporation and application for federal tax exemption are to house records created or received during the Clinton presidency, to allow research into these records, and to endow facilities based in Little Rock, Arkansas.

A public charity cannot divert funds intended for its authorized mission to another tax-exempt purpose without clearing its new mission, in advance, with the IRS (see page 6) and then informing regulators in all relevant U.S. states that its mission has been changed by evidencing amended articles of incorporation that clearly explain its adjusted tax-exempt purposes.

The Clinton Foundation has attempted to amend its articles of incorporation several times to change its name, but not to add to, change, or otherwise revise its authorized purposes. This means that the Clinton Foundation has never held lawful power to "fight HIV/AIDS" or "fight climate change" or provide disaster relief internationally or domestically, yet its many marketing brochures, public filings, and press releases detail radical alterations in professed purposes starting by 2002.

Moreover, ongoing, close review of public records reveals that the Clintons have traveled the world at foundation expense while letting it also pay for numerous employees' handling their affairs, whose cost should properly have been borne by the Clintons out of their after-tax incomes.

Subsidizing fancy lifestyles to which political families become accustomed while in office, or launching political campaigns, certainly are not valid, or authorized tax-exempt purposes. Doing so to the extent that is obvious in publicly available filings typically would shutter a supposed charity and cripple those held responsible with large financial penalties and lengthy jail terms.

As the IRS explains on page four of this document, publicly supported charities like the Clinton Foundation may not confer "private gains" on trustees, directors, executives, or key employees:

"A public charity is prohibited from allowing more than an insubstantial accrual of private benefit to individuals or organizations. This restriction is to ensure that a tax-exempt organization serves a public interest, not a private one. If a private benefit is more than incidental, it could jeopardize the organization's tax-exempt status.

Related: Family's Illegal Control of Clinton Charity Violates Multiple State Laws, Regs

"No part of an organization's net earnings may inure to the benefit of an insider. An insider is a person who has a personal or private interest in the activities of the organization, such as an officer, director or a key employee.

"This means that an organization is prohibited from allowing its income or assets to accrue to insiders. An example of prohibited inurement would include payment of unreasonable compensation to an insider. Any amount of inurement may be grounds for loss of tax-exempt status."

In addition, public charities may not subsidize political campaigns (see pages 4-5):

"Public charities are prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office. Contributions to political campaign funds or public statements of position (verbal or written) made on behalf of the organization in favor of, or in opposition to, any candidate for public office clearly violate the prohibition against political campaign activity. Violation of this prohibition may result in revocation of tax-exempt status and/or imposition of certain excise taxes."

What actually happened is that starting Oct. 23, 1997, the Clintons created a super-charged "post-presidential" slush fund that they never expected the IRS to audit, or U.S. attorneys anywhere to prosecute.

Are Clinton Foundation prosecutions close at hand? Watching recent events in Arkansas and in Missouri suggests that reports of a Clinton restoration are as misguided as they are premature.

Accounting firm BKD LLP, the auditors for the charity involved in the Arkansas case linked above, also figure prominently in failing to catch evolution of the vast network of so-called charities the Clintons spawned during the crucial years from 2002 through 2012, when Robert Mueller led the FBI.

U.S. attorneys in Arkansas have targeted a $1 million charity fraud, so it seems reasonable that they should certainly also be interested in prosecuting one whose declared revenues since inception exceed $2 billion.

If there is any justice left in Trump's Department of Justice, it is well past time to train the full force of federal resources on as yet unprosecuted Clinton Foundation charity frauds and teach lasting lessons to false-front philanthropists everywhere.

To be continued.

Charles Ortel, a retired investment banker, concentrates on exposing complex frauds in his new career as an investigator, writer and commentator. Since August 2017, he has been hosting the "Sunday with Charles" podcast and covering the Clinton Foundation case in depth, using publicly available source materials.​ To view his previous LifeZette contributions, go here.

(photo credit, homepage image: Hillary Clinton, President Bill Clinton, CC BY-ND 2.0, by Ida Mae Astute, Disney | ABC Television Group)

Last Modified: May 4, 2018, 6:08 am

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