NEW YORK – The “Big Four” accounting firm Pricewaterhouse Coopers failed to detect and report the Clinton Foundation’s “apparent massive diversions of funds” from a global charity that fights HIV/AIDS, according to respected Wall Street analyst Charles Ortel.

As WND reported Tuesday, Ortel has concluded after a thorough investigation of the Clinton Foundation’s financial records that Pricewaterhouse Coopers, or PWC, bears civil and possibly criminal liabilities, either intentionally or through negligence, for participating in financial fraud by generating audit financial statements riddled with errors and misstatements.

Ortel, managing director of Newport Value Partners LLC, contends PWC, which began auditing the Clinton Foundation in 2013, allowed the Clintons to continue diverting millions of dollars donated for charitable purposes to the personal enrichment and benefit of themselves and their close associates, a crime called inurement.

Ortel says the Clintons siphoned tens of millions of dollars annually from funds received by the Clinton Foundation’s Clinton Health Access Initiative from UNITAID, a global health initiative to fight HIV/AIDS, Malaria and Tuberculosis that is financed mostly by a levy on airline tickets. UNITAID, which negotiates low prices for drugs and diagnostics, implements its work through groups like the Clinton Health Access Initiative, also known as CHAI.

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Ortel bases his conclusions on financial information drawn directly from UNITAID sources compared to reports by the Clinton Foundation that were validated in the PWC audit for 2013.

He contends PWC failed to conduct the basic due diligence required of auditors, neglecting to discover and report the diversion of funds. The Clintons purportedly used their international prestige to “leverage” international manufacturers of prescription quality drugs and various health care products and sell them to Third-World countries at a discount price to combat AIDS/HIV.

PricewaterhouseCoopers has not replied to numerous requests from WND, by email and by telephone, to comment. Ortel also asked PWC a number of questions based on his investigation and has received no reply.

Ortel, a frequent guest on Bloomberg television and a contributor to the Washington Times and others, began his Wall Street career in 1980 with Dillon, Read, & Co., followed by the Bridgeford Group and Chart Group. His international investment analysis frequently centers on complex legal and financial structures. Newport Value Partners LLC, his current company, provides independent investment research to professional investors. He is a graduate of the Horace Mann School, Yale College and the Harvard Business School.

‘Reverse Robin Hood’

UNITAID was formed in 2006 by a group of governments, led by France, the United Kingdom and Norway.

The Bill and Melinda Gates Foundation has heavily supported UNITAID, providing 3.2 percent of all contributions from 2006-2012, according to the UNITAID website.

Ortel notes that in UNITAID’s financial statements, the Clinton Foundation and CHAI are described as “implementers”–essential organizations that help ensure health products reach intended beneficiaries.

As WND previously reported, Ortel has claimed the Clintons used their tax-exempt foundation to conduct a “reverse Robin Hood,” robbing the average air traveler to benefit themselves at the expense of AIDS/HIV treatment.

The levy imposed on airline tickets by the French government alone over six years, according to records published by the French Civil Aviation Authority, is more than $1 billion.

“The air ticket levy, a predictable and robust source of revenue, contributes to the fight against HIV/AIDS, tuberculosis and malaria, diseases that cause more than 4 million deaths every year,” UNITAID said in January 2013.


Ortel constructed the table below comparing the amount UNITAID reported contributing to the Clinton Foundation in 2013 with the amounts the Clinton Foundation receipts reported from UNITAID on IRS Form 990 reports for 2006 through 2010:


The amount shown as a UNITAID disbursement to the Clinton Foundation in 2006 is derived from a UNITAID Board Resolution, dated Nov. 29-30, 2006, which indicates UNITAID may have disbursed $9.1 million toward the Clinton Foundation on Dec. 1, 2006.

Except for 2010, all amounts received by the Clinton Foundation from UNIAID are estimates, Ortel pointed out, as the Clinton Foundation does not specifically identify donors in information it has submitted in the public domain. For 2011 through 2013, amounts shown are taken from audits conducted by Mayer Hoffman McCann, PC, a U.S.-based firm with limited international capabilities, of what Ortel calls “New CHAI.”

The Clinton Foundation has explained that when Hillary Clinton joined the Obama Cabinet, the foundation closed the Clinton Health Access Initiative Inc., known also as CHAI, which had been operating as a program of the Clinton Health Foundation. CHAI was then reopened it as a separate organization responsible for filing its own financial disclosures.

Ortel points to what he sees as inaccurate accounting for a substantial outflow to the Clinton Foundation from UNITAID of $21,609,400 and a related outflow to the Clinton Foundation of $28,647, 779. He says it is clearly part “of a long-standing illegal practice dating to 2006, when substantial sums were diverted by persons unknown and for reasons unknown from amounts UNITAID documents were disbursed into the care of the Clinton Foundation.”

The key problem, Ortel says, is that financial results for New CHAI, as reported in Clinton Foundation consolidated financial statements, were never properly verified by any of the Clinton Foundation auditors, BKD, MHM and PWC.

“There is no evidence PWC, or any other Clinton Foundation auditor back to 2006, ever bothered to check actual disbursement of funds from UNITAID to determine how the funds were transferred to and deposited at the Clinton Foundation, or even to reconcile Clinton Foundation receipts from UNITAID as reported in Clinton Foundation IRS Form 990 tax filings with audited annual financial statements reported by UNITAID,” Ortel stressed.

Ortel has not yet received a response he posed to PWC via email noting that BKD was replaced as auditor for CHAI in connection with the 2012 audit for CHAI. The replacement auditor, MHM, subsequently determined that the accounting regarding UNITAID had been incorrectly stated during 2012. By May 2013, the Clinton Foundation restated receipts from UNITAID as agency transactions for 2011 and 2012.

“The general public that is so supportive of tax-exempt organizations and of the Clinton Foundation, in particular, relies upon auditors such as PWC to do required homework,” Ortel notes.

“What evidence did PWC auditors review and how thoroughly did they investigate?” Ortel asks. “Did PWC examine as board minutes, bank statement records and audit work papers of the accounting firms BKD and MHM that ‘audited’ the Clinton Foundation results from 31 December 2003 forward?”

Ortel says one can only conclude “comparing PWC work product to information now in the public domain – including the discrepancies between 2006 and 2013 in the amounts UNITAID claims to have paid CHAI and what the Clinton Foundation claims to have received – that PWC is guilty of gross misconduct issuing its ‘audit’ of Clinton Foundation financial results for 2013.”


Separately, Ortel has reported that unlike BKD, MHM concluded by May 23, 2013, that CHAI had been acting all along only as an agent in performing work in conjunction with UNITAID.

As a consequence, CHAI’s consolidated revenues and expenses were much smaller than originally reported in BKD’s 2011 audit.

For 2011, BKD’s audit (completed June 27, 2012, but listed as having been updated Nov. 22, 2013) confirmed consolidated revenues of $171.3 million for CHAI, consolidated program costs of $164.5 million, consolidated total costs of $172.7 million, and a consolidated decrease in net assets of $1.4 million.

MHM explained in its report how it understood CHAI was performing work with UNITAID: “CHAI acts as an agent acting on behalf of UNITAID overseeing the various business aspects of enabling the efficient and effective administration of the program. As an agent, CHAI does not record revenue or expenses associated with UNITAID funds.”

So, in contrast to BKD, when MHM looked at CHAI’s 2011 results, it confirmed that revenues were 61.7 percent lower at $65.6 million, program costs were 64.2 percent lower at $58.9 million, total costs were 61.2 percent lower at $67 million and there was an identical decline in net assets of $1.4 million.

The Clinton Foundation’s role as an “implementer” in the UNITAID program suggests CHAI acts primarily as an intermediary, finding and negotiating with discount drug companies to connect with UNITAID. But the funds UNITAID pays to CHAI are not allocated by UNITAID to include payment for the discount drugs.

With this complex UNITAID history, Ortel asks: “How much work did the PWC audit team perform to investigate the long pattern of misconduct that is apparent conducting an elementary comparison of amounts UNITAID claims, in publicly available filings, that it disbursed to the Clinton Foundation, with amounts revealed in Clinton Foundation IRS Forms 990 concerning its significant donors from 2006 through 2013?”

Ortel concluded: “PWC did not uncover and reveal the apparent, massive diversions of funds donated by UNITAID toward the Clinton Foundation between 2006 and 2013.”

Ortel also pointed out consistent UNITAID claims that the organization donated to “Clinton Foundation HIV/AIDS” or CHAI are problematic. He explained it is unclear such an entity was constituted properly under applicable U.S. laws or that CHAI ever obtained an IRS determination letter authorizing the foundation to accept tax-exempt donations to combat HIV/AIDS globally.

Substandard drugs

As WND previously reported, the Clinton Foundation relationship with UNITAID also entailed purchasing substandard HIV/AIDS drugs from a pharmaceutical company headquartered in India. The foundation claimed credit for combating the disease even though the drugs delivered to Third World sufferers of HIV/AIDS were useless.

According to the UNITAID website, CHAI, established by President Bill Clinton in 2002, reached out to UNITAID, created in 2006, “to reach groups in developing countries that were neglected by HIV drug markets,” resolving to combine forces in 2008.

The UNITAID-CHAI joint venture’s goal was to combine UNITAID’s innovative financing that relied on levies charged on airline tickets in participating countries with CHAI’s entrepreneurial effort of distributing ARV drugs made by international pharmaceutical companies throughout the developing world at prices discounted because of the massive scale of the market.

“The deal positioned the Clinton Foundation to have access to hundreds of millions of dollars from what amounted to a tax imposed on millions of average airline passengers,” explained Ortel.

Ortel concluded the “scam was perfected when a key player in developing the CHAI ‘discount generic drug’ strategy touted as revolutionary by Bill and Hillary Clinton, namely Ranbaxy in India, achieved their ‘economy of scale’ by selling drugs the company knew were so drastically substandard that the Ranbaxy ARV products had no chance of curing any HIV/AIDS patients taking the drugs in the third world countries to which the Clinton Foundation delivered them.”

“It seems in hindsight a textbook case of reckless and wanton neglect,” Ortel said.

‘It’s just blacks dying’

In May 2013, investigative reporter Katherine Eban wrote a story in Fortune magazine titled “Dirty Medicine” in which she detailed the Ranbaxy pharmaceutical scandal.

Ranbaxy on May 13, 2013, pleaded guilty to seven federal criminal counts of selling adulterated drugs with an intent to defraud, failing to report that its drugs didn’t meet specifications, and making intentionally false statements to the government. Ranbaxy agreeed to pay $500 million in fines, forfeitures and penalties, the most ever levied against a generic-drug company.

The Fortune article captured the moral bankruptcy of Ranbaxy in a conference call Dr. Kathy Spreen, Ranbaxy’s executive director of clinical medicine, had with a dozen company executives.

One of the participating Ranbaxy executives dismissed the concern the company was producing defective ARV drugs for HIV/AIDS patents in Africa.

“Who cares? It’s just blacks dying.,” the exec said.

Fortune further documented that a decision by Ranbaxy to withdraw all seven of its ARVs tested by Vimta Labs from WHO prequalification as announced by the WHO on Nov. 9, 2004, was dishonest. Ranbaxy executives plotted to blame the problem on fraudulent tests run by a rogue contractor without disclosing further problems that may have made it more difficult, if not impossible, to re-establish WHO approval of Ranbaxy ARV drugs tested by labs other than Vimta.

Less than a year later, on Aug. 16, 2005, Ranbaxy managed to get the WHO to reinstate the seven ARV drugs to the WHO prequalification list, simply by convincing the U.N. body that Ranbaxy management had solved the problem by replacing Vimta Labs with “globally recognized contract research organizations” assigned to conduct independent tests of the ARV drugs Ranbaxy had produced in its “WHO-approved plants.”

The Fortune exposé, however, made clear Ranbaxy never stopped the subterfuge until forced to do so by the Department of Justice settlement in 2013.

Ranbaxy “manipulated almost every aspect of its manufacturing process to quickly produce impressive-looking data,” Fortune reported, including forging standard operating procedures to hide from health inspectors the truth that Ranbaxy never stopped substituting “cheaper, lower-quality ingredients in place of better ingredients, to manipulate test parameters to accommodate higher impurities, and even to substitute brand-name drugs in lieu of their own generics in bioequivalence tests to produce better results.”

Fortune further exposed “systematic fraud in Ranbaxy’s worldwide regulatory filings” designed to hide that “the majority of products filed in Brazil, Mexico, Middle East, Russia, Romania, Myanmar, Thailand, Vietnam, Malaysia, African Nations, have data submitted which did not exist or data from products and from other countries.”

Ranbaxy “not only invented data but also fraudulently mixed and matched data, taking the best results from manufacturing in one market and presenting it to regulators elsewhere as data unique to drugs in their markets,” Fortune said.

For its HIV drugs, “Ranbaxy had used ingredients that failed purity tests and blended them with good ingredients until the resulting mix met requirements,” Fortune said.

Such “a mélange cold degrade or become toxic far more quickly than drugs made from the high-quality materials required.”

“The Ranbaxy tragedy,” Ortel said, “was that even after the Clintons had reason to suspect Ranbaxy was producing defective ARV drugs for HIV/AIDS patients in third world countries,” CHAI “continued to allow Ranbaxy to sell Ranbaxy ARV drugs into the stream of pharmaceuticals that flowed to desperately poor suffers, as if there were no problem.”

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