Bill and Hillary Clinton

NEW YORK – After an exhaustive search of all relevant documents available online, Wall Street investor and analyst Charles Ortel has concluded the Clinton Foundation’s solicitation of “charitable donations” to fight HIV/AIDS in Third World countries traces back to a conversation Bill Clinton had with Nelson Mandela in July 2002.

However, the Clinton Foundation did not receive IRS tax-exempt authorization to fight HIV/AIDS until eight years later.

Beginning in 2002, the Clinton Foundation portrayed itself as a charitable organization soliciting tax-exempt donations worldwide to fight the HIV/AIDS pandemic.

However, these efforts were “not explicitly approved in advance by the IRS and therefore were not validly constituted under domestic and international laws,” Ortel stresses.

The lack of approval, Ortel contends, constitutes a serious violation of IRS regulations that require public charities, such as the Clinton Foundation, to apply for and to receive what is known as an “IRS determination letter.” The letter specifies the precise charitable purpose for which the foundation is allowed to solicit donations on a tax-exempt basis.

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Clinton Foundation’s original purpose

On May 12, WND reported the Clinton Foundation’s IRS determination letter dating back to the foundation’s creation in 2001 was not archived on the foundation website.

After that report, the Clinton Foundation published on its website an IRS letter dated Jan. 29, 1998, in which the “William J. Clinton Presidential Foundation” was notified by the IRS that it was exempt “as an organization described in Section 501(c)(3).”

The Form 1023 application for recognition of exemption, submitted to the IRS Dec. 23, 1997, also appeared on the Clinton Foundation website for the first time after the publication of the May 12 WND article.

However, the foundation website posted no documentation of ever having received an IRS determination of tax-exempt status.

The Form 1023 submitted Dec. 23, 1997, makes clear the only purpose for which the William J. Clinton Presidential Foundation was applying to the IRS for tax-exempt status was for the design, construction and endowment of the Clinton Presidential Library in Little Rock, Arkansas.

The Clinton Foundation’s 2003 IRS Form 990, Part III filing had identical language describing the organization’s “primary exempt purpose.”
A change in language came in the Clinton Foundation’s 2003 IRS Form 990, Part III filing, when its “primary exempt purpose” was rewritten as follows:

“President Clinton established the William J. Clinton Foundation (the foundation’s original name in 2001) with the dual missions of constructing and endowing the Clinton Presidential Center and Park in Little Rock, Arkansas and continuing the work of his presidency to strengthen the capacity of people in the United States and throughout the world to meet the challenges of global interdependence. To advance the mission the foundation has developed programs and partnerships in the following areas: economic empowerment; health security with an emphasis on HIV/AIDS; racial, ethnic and religious reconciliation; leadership development and citizen service.”

The Clinton Foundation’s shifting purpose

After the May 12 article was published by WND, a second IRS Form 1023 and IRS determination letter suddenly appeared on the Clinton website, both dating from 2010. Both were filed not by the William J. Clinton Presidential Foundation under any of the various names the organization has operated since inception, but under the auspices of the Clinton Global Initiative.

The Clinton Foundation website today further specifies that from 2005 to 2009, the Clinton Global Initiative “was an initiative of the Foundation.” But from 2010 to 2013, the Clinton Global Initiative “operated as a separate but affiliated non-profit organization as part of an agreement between the Foundation and the Obama Administration.”

The Clinton Foundation website further specifies that from 2010 to 2013, the foundation “continued to consolidate Clinton Global Initiative’s finances into its annual financial reporting.”

This appears in direct contradiction to the 2010 Clinton Global Initiative Form 1023 and the 2010 IRS determination letter written to the Clinton Global Initiative that treats the initiative a separate organization.

Why would the Clinton Global Initiative apply for its own IRS tax-exempt determination, unless it was intended to operate as a separate organization?

If the Clinton Global Initiative was going to pursue purposes that included fighting the HIV/AIDS pandemic, it needed its own IRS determination letter. The expanded purposes would not be permitted under the original tax-exempt status granted the Clinton Foundation to build the Clinton Library.

The Clinton Global Initiative Form 1023 filed in 2010 specifically states the Clinton Global Initiative was incorporated on Sept. 4, 2009, meaning it had to have been a subsidiary operation of the Clinton Foundation.

But if the Clinton Global Initiative was a separate organization in 2009, why were the Clinton Global Initiative financials being consolidated with the Clinton Foundation financials in the period 2010 through 2013?

Ortel continues to question whether the Clinton Foundation validly changed its original tax-exempt purpose starting in July 2002, when the foundation expanded its purpose to address the HIV/AIDS pandemic.

“The Clinton Foundation has not yet produced any verifiable evidence that it altered its authorized tax-exempt purposes in full compliance with applicable laws,” Ortel concludes in his Second Interim Report.

“Furthermore, acute, continuing concerns have only increased about ‘inurement’ – how individuals and other entities may have derived ‘private benefit’ that is more than ‘insubstantial’ through activities in concert and related to those of the Clinton Foundation,” he adds.

The Clinton Global Initiative Form 1023, dated Aug. 9, 2010, and the Oct. 6, 2010, IRS determination letter are the only documents the Clinton Foundation has ever produced as evidence the IRS granted tax-exempt status to the Clinton Foundation and its various incarnations for any purpose broader than building the Clinton Library.

Nelson Mandela inspires HIV/AIDS focus

In the May 12 article, WND also reported Ortel traced the idea to morph the Clinton Foundation into an international charity devoted to combating the HIV/AIDS pandemic to a conversation Bill Clinton had with Nelson Mandela. Clinton relates the story in his 2007 bestselling book “Giving: How Each of Us Can Change the World.”

Clinton wrote:

After Nelson Mandela and I closed the World AIDS conference in Barcelona in [July] 2002, Prime Minister Denzil Douglas of St. Kitts and Nevis asked me to help the Caribbean nations establish and fund systems for the prevention, care, and treatment of HIV/AIDS. I agreed to do what I could, but with limited staffing in Harlem and Little Rock and an already crowded list of commitments, I needed some help. I called Ira Magaziner, who had spearheaded our efforts in healthcare and e-commerce in the White House, and asked him to organize and lead the project.

Ortel noted that, according to Bill Clinton, the launch internationally of the Clinton Foundation HIV/AIDS initiative was swift and aggressive.

Clinton picked up the narrative at the end of page 179, continuing onto page 180, of “Giving”:

Initially, the plan we developed called for assembling volunteers to work with governments that asked for our help to increase care and treatment, beginning in the Caribbean. As we were getting organized, I asked wealthier nations to commit the funds necessary to upgrade and expand developing nations’ health services and to fund the purchase of generic drugs. The foundation’s expenses were covered by private citizens’ donations from the United States, Canada, the United Kingdom, Ireland, and other nations.”

Ortel was highly critical of the Clinton Foundation deciding on its own, without filing a Form 1023 or receiving an IRS determination letter, to change its tax-exempt purpose.

“Though there are numerous press releases and other accounts of extensive global activity by the Clinton Foundation fighting HIV/AIDS from July 2002 onward, companion financial disclosures filed for 2002 and 2003 do not explicitly document related inflows and outflows of the HIV/AIDS initiatives,” Ortel writes.

In his most recent report, Ortel puzzles over whether the Clinton Global Initiative, the Clinton Health Access Initiative and the Clinton HIV/AIDS Initiative were an elaborate smoke screen designed to cover the fact the Clinton Foundation was operating outside the law for eight years.

The foundation, he reiterated, was raising “charitable donations” to combat HIV/AIDS when it had no IRS determination letter authorizing tax-exempt status for that purpose.

Ortel notes the following:

  • “Between 12 July 2002 and 23 March 2004, the Clinton Foundation illegally held itself out as a tax-exempt organization authorized by the IRS to fight the HIV/AIDS pandemic internationally. Substantial efforts during this time period were not explicitly approved in advance by the IRS and therefore were not validly constituted under domestic and international laws.”
  • “On 24 March 2004, Clinton Foundation Trustees and others created an entity, the original Clinton Health Access Initiative, CHAI, that they later claimed falsely was an IRS-authorized tax-exempt organization, as and after they filed a false and materially misleading application in 2010 with the IRS and with numerous domestic and international counterparties, including regulators and donors.”
  • “By 31 December 2005, and afterwards, the Clinton Foundation falsely claimed that it had perfected a merger with the original Clinton Health Access Initiative inside the United States and in relevant foreign jurisdictions, a claim that was and remains materially misleading.”

In his various reports to date, Ortel underscores repeatedly that the tax implications could be dire for the Clintons personally, for the directors of the Clinton Foundation and for donors around the world who believed they could take tax-exemptions for donations.

IRS regulations strict

As Ortel points out, public charities such as the Clinton Foundation are subject to a variety of tough strictures, as the U.S. Internal Revenue Service section 501(c)(3) “exemption requirements” for tax-exempt organizations makes clear:

To be tax-exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be organized and operated exclusively for exempt purposes [emphasis added] set forth in section 501(c)(3), and none of its earnings may inure to any private shareholder or individual.

To be organized properly as a tax-exempt corporation, the IRS requires:

“The organizing documents must limit the organization’s purposes to exempt purposes in section 501(c)(3) and must not expressly empower it to engage, other than as an insubstantial part of its activities, in activities that are not in furtherance of one or more of those purposes [emphasis added].”

And again:

“An organization will be regarded as operated exclusively for one or more exempt purposes only if it engages primarily in activities that accomplish exempt purposes [emphasis added] specified in section 501(c)(3). An organization will not be so regarded if more than an insubstantial part of its activities does not further an exempt purpose.”

“So, a tax-exempt corporation can not validly serve changing and vague purposes, particularly if it does not bother to constitute itself within the legal jurisdictions in which it operates or make truthful and complete informational returns in its interactions with regulators and legal authorities,” Ortel concludes after a careful reading of the IRS regulations for 501(c)(3) organizations.

Ortel’s argument that the Clinton Foundation operated illegally derives from his reading of Clinton Foundation IRS tax-filings, including relevant IRS Form 990s that indicate the foundation, originally organized only to provide a presidential library in Little Rock, Arkansas, self-defined combating HIV/AIDS as a tax-exempt charitable purpose without bothering to obtain a new IRS determination letter.

IRS Publication 4221 PC (Rev.7-2014), titled “Compliance Guidance for 501(c)(3) Public Charities,” stresses on page 21 the importance before soliciting tax-exempt donations of having received a determination letter from the IRS specifying the purpose for which the public charity is authorized to solicit the donations.

The IRS specifies that among the permanent records a public foundation must retain are the following: the application to the IRS for recognition of tax-exempt status, the determination letter recognizing tax-exempt status, and all organizing documents including articles of incorporation and by-laws, with amendments, as well as board minutes.

On page 23, the IRS publication specifies the following regarding public charities that change their purpose for raising tax-exempt funds: “A public charity that has had a change in its public charity or private foundation status should request a new determination from the EO Determinations office as well.”

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