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Hillary, Chelsea and Bill Clinton

NEW YORK – Clinton Foundation spokesmen demonstrated little knowledge of the nonprofit’s “long and deeply flawed history” when they insisted a spinoff charity didn’t need to refile IRS tax statements due to errors, contrary to admissions reported by Reuters in April, charged Wall Street analyst and investor Charles Ortel.

Politico’s Josh Gerstein reported Monday that Maura Daley, a spokeswoman for the Clinton Health Access Initiative, denied conceding the group made reporting errors on its 2012 and 2013 tax filings and planned to refile the returns.

However, Politico contacted Reuters reporter Jonathan Allen, who stood by the accuracy of his report.

The Clinton Health Access Initiative was set up in 2002 as the Clinton HIV/AIDS Initiative and spun off from the foundation in 2010.

Ortel, who has conducted an extensive investigation of the foundation’s finances, said the Clinton officials apparently also are not aware of “numerous state, federal and foreign reporting requirements of which the Clinton Foundation and its constituent elements have fallen afoul for numerous years.”

“Comments today by spokespeople for the Clinton Foundation and the Clinton Health Access Initiative open up a ‘Pandora’s Box’ for trustees, executives, auditors, other advisers and insiders of the Clinton Foundation and its constituent elements,” Ortel told WND.

“Evidently, these Clinton Foundation spokespeople are not sufficiently educated concerning the long and deeply flawed history of the Clinton Foundation that dates back to January 2001, when Bill Clinton began to define his post-presidency, in part, by hitching himself to this tax-exempt organization,” Ortel continued.

He noted the Clinton Foundation as originally constituted was only granted IRS approval to accept tax-deferred donations for what was supposed to be a presidential library, including an archival records repository and a research facility, to be based in Little Rock, Arkansas.

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Ortel said that if the Clinton Foundation “were not so heavily involved soliciting donations across state and national boundaries using the mails, telephones, and digital media, the foundation’s trustees and other key affiliated persons might not find themselves in as much trouble as they now seem to be rushing headlong to embrace.”

He said that simply filing 2014 tax forms has now become especially problematic for Clinton Foundation officials and trustees.

“Clinton Foundation IRS tax-filings on Form 990 and audited financials filed with the IRS for 2014 must be prepared in strict accordance with GAAP [Generally Accepted Accounting Principles] requirements, that must be consistently applied over prior years to be validly filed,” Ortel stressed. “Given the admission previous filings were erroneous and the extensive research I have conducted supporting that conclusion, this will prove quite difficult to do.”

In a WND story Monday, Ortel argued: “State, federal and foreign laws also require truly ‘independent and certified’ audits, but the ‘audits’ procured by Clinton Foundation trustees do not comply with these regulations, which makes all historical filings since inception incomplete and error-ridden.”

WND reported in June Ortel’s allegations that the accounting irregularities at the Clinton Foundation involve the current accounting firm, “Big Four” firm PricewaterhouseCoopers, as well as the previous Clinton Foundation accountants, BKD and MHM.

“The accounting irregularities include under-reporting of donations, failures to spot and explain diversions of donated sums from their intended purposes, failures to control expenses and extraordinary failures to account properly in U.S. dollars for hundreds of millions in revenues and expenses that flowed to and from the United States to foreign locations,” Ortel argued.

As seen below, Ortel provided direct refutation of various points stated by Clinton Foundation officials to Politico.

Politico: “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.”

Ortel: “The Clinton Health Access Initiative Inc. (‘New CHAI’) was illegally created between Sept. 29, 2009, when it was formed as an Arkansas nonprofit corporation, and March 15, 2010, when it received a ‘determination letter’ from the IRS, having submitted a false and materially misleading application to the Tax-Exempt Organization of the IRS on Form 1023. This application is not linked at the main Clinton Foundation website, but a summary of it can be found at the New York Charity Bureau website whose portal.”

Politico: “A series of articles published as Hillary Clinton’s presidential campaign kicked off this spring noted that the Clinton Health Access Initiative, set up in 2002 as the Clinton HIV/AIDS Initiative, had not fully complied with aspects of a conflict-of-interest agreement negotiated before the former first lady and senator became secretary of state in 2009.”

Ortel: “The Clinton Foundation HIV/AIDS Initiative Inc. (‘Old CHAI’) was created as an Arkansas corporation in March 23, 2004. Prior to then, dating back to July 12, 2002, Bill Clinton and Ira Magaziner, who were not officers or directors of the Clinton Foundation, held themselves out as capable of binding the Clinton Foundation in supposedly charitable efforts to fight against HIV/AIDS internationally in numerous countries. None of these efforts were validly constituted, in the United States or the foreign nations where donations were solicited, and none were disclosed in the first fraudulent application to create an IRS tax-exempt organization that was filed late in April 2004.”

Ortel: “So far, the Clinton Foundation, in violation of numerous domestic and international laws has never disclosed the complete application to form Old CHAI, including relevant exhibits, nor has it tendered verifiable proof that Old CHAI ever received a validly procured determination letter from the IRS. Moreover, the Clinton Foundation has never proven that it was validly authorized by the IRS to control Old CHAI.”

Politico: “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.”

Ortel: “The larger issue here is that ‘grants’ recorded from UNITAID (the largest cumulative donor to the Clinton Foundation at $566.3 million from late 2006 through 2013) were treated, possibly incorrectly as ‘principal’ transactions, when it was determined by November 2013 that these should, instead have been treated as ‘agency’ transactions, and not consolidated as revenues and as expenses in the Statement of Activities for New CHAI for 2010, 2011, 2012 and later for 2013.

“However, the Clinton Foundation elected incorrectly in 2013, concerning 2012, and in 2014, concerning 2013 to consolidate New CHAI on a radically different basis, treating UNITAID donations in these years as principal, rather than agency flows. This incorrect treatment had the effect in 2012 and 2013 of swelling total consolidated revenues and making consolidated overheads (management and general and fundraising) seem a smaller percentage of the consolidated total.

“Moreover, this incorrect treatment was inconsistent with treatment in past years, and, so, past years should certainly have been restated in the accompanying independent certified audits that are required pursuant to state, federal, and foreign laws.”

Politico: “However, in a recent exchange with POLITICO, Daley denied the initiative ever committed to refiling and said no revised forms are being prepared.

“Contrary to what was reported, CHAI has consistently stated that they would conduct a review process to determine whether the transposition errors required a refiling,” Daley said Monday. “After conducting the review, the transpositional errors made had no material impact and we do not believe a refiling is required.”

Ortel: “The question is not what management believes, but what do the auditors believe and what representations may have been made to the auditors by the Clinton Foundation. Do auditors of New CHAI understand that it was created fraudulently?”

Politico: The HIV organization’s 2012 return and a revision filed last year reported receipt of about $45.4 in government grants. The 2013 return showed $55.9 million in such grants.

Ortel: “There is no such thing as the ‘Clinton HIV/AIDS Initiative.’ It was illegally constructed after July 2002. If we are to believe the Clinton Foundation filings on the foundation’s website, a similar sounding entity was merged out of existence on December 31, 2005. In order to view the applicable merger agreement, go to the Propublica website and there a complete agreement is posted, explaining key terms that appear purposefully obscured on the Clinton Foundation website.”

Politico: “The Clinton HIV/AIDS Initiative and the broader Clinton Foundation are facing a Nov. 16 to file returns listing their income and expenses for the 2014 calendar year, including details of how much money was paid to key staffers, officers and contractors. The initial deadline is May 15, but many large nonprofit organizations routinely seek two three-month extensions from the IRS.”

Ortel: “This misses, again perhaps purposefully, the central point: An IRS-authorized tax-exempt organization is not allowed to solicit funds from potential donors on the basis of false and materially misleading public filings. Such an organization may only pursue specifically authorized purposes.”

Politico: Amid a flurry of critical media attention and reports on lapses related to the ethics agreement, the Clinton Foundation said in April that it was “likely” to refile its tax returns for past years to correct similar errors regarding reporting of government grants.

’We have said that after a voluntary external review is completed we will likely refile forms for some years,’ then-acting Clinton Foundation CEO Maura Pally wrote in a blog post. ‘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.’

“Clinton Foundation spokesman Craig Minassian indicated Friday that the foundation plans to file its 2014 form by the Nov. 16 deadline, but noted there is no specific deadline for revisions to past forms and did not say definitively whether any revised forms will be filed in the near future or ever.”

Ortel: “Minassian might want to check all 990s on the Clinton Foundation website and then review more carefully state and foreign filing requirements for 501(c)3 organizations.

“Why did the Clinton Foundation spend so much money on direct mail solicitation in 2001, for example, yet claim that it did not register within any U.S. state?

“Minassian should definitely check state-filing requirements in Georgia that are super-strict. And he should check registration requirements in key foreign nations including China, where charity fraud is punished harshly.”

Politico: “‘November 16 is only the IRS deadline for the previous year’s (2014) 990 to be filed,’ Minassian said. ‘We’ll keep you posted on our plans.’

‘Both the Clinton Foundation and the Clinton Health Access Initiative made a quarterly, voluntary disclosure of donors last week, The HIV organization’s donor list still contains an entry for anonymous gifts, labeled as ‘Individual and Unsolicited Donations.’”

Ortel: “Latest disclosures boasting of radically improved fundraising successes even as relevant filings remained false and materially misleading only compound legal worries for all trustees of Clinton Foundation entities.”

As WND reported May 17, Ortel calculated that $17 million went missing from Clinton Foundation financial reports. On Dec. 31, 2009, when Hillary Clinton became President Obama’s secretary of state, the Clinton Foundation closed Health Access Initiative Inc., which Ortel has termed “Old CHAI.” Then, operating as a program initiative of the Clinton Foundation, it reopened the Clinton Health Access Initiative Inc., which Ortel terms “New CHAI,” as a separate organization responsible for filing its own IRS tax Form 990 as well as separately audited financial statements.

WND reported in June that along with filing financial reports filled with errors and misstatements, PricewaterhouseCoopers neglected to verify whether or not the Clinton Foundation obtained tax-exempt status for its various sub-entities, including its AIDS charity.

In September, WND reported that Ortel, after an exhaustive search of all relevant documents available online, 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 stressed.

The lack of approval, Ortel contended, 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 IRS determination letter specifies the precise charitable purpose for which the foundation is allowed to solicit donations on a tax-exempt basis.

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