Clinton Foundation on charity 'watch list'

Chelsea Clinton and Bill Clinton (Clinton Foundation photo)

NEW YORK – As the Clinton Foundation gets ready for the opening Saturday of the annual meeting of the Clinton Global Initiative in New York City, the organization remains on the "watch list” of one of the nation’s most prestigious charity watchdog organizations.

Sandra Miniutti, vice president of marketing and chief financial officer at Charity Navigator, explained to WND the Clinton Foundation is on the watch list because of its multiple entities and concerns about foreign donations and accounting issues.

“We can’t rate the organization at this time because it is made up of multiple entities which some have been spun off and others brought back into the main organization,” explained , Miniutti said in an email Monday.

“Since our rating analysis includes a look at the financial performance of charities overtime (specifically the revenue and program expense growth metrics), the spin-offs/re-absorptions would create a skewed picture of the organization’s financial health,” she continued.

“We would be happy to rate it again in the future if it maintains the current structure for several years.”

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Miniutti also pointed to scandals that have been exposed in the media reports by the Wall Street Journal, Reuters, Politico, the International Business Times and others.

She mentioned "concerns over foreign donations to the foundation while Hillary Clinton was secretary of state, the change in leadership at the foundation and the fact that it needed to file multiple amended Form 990s."

While not specifically cited by Charity Navigator, reporting on alleged Clinton Foundation scandals would also include the work of Peter Schweizer in his recent book “Clinton Cash” as well as the series of articles WND has published since April detailing the extensive investigation Wall Street analyst and investor Charles Ortel has conducted on the publicly available Clinton Foundation government filings, audited financial statements and annual reports since the foundation’s inception.

In her emails, Miniutti asked WND if “there is something that you’d like our analysts to review?” WND referenced the WND articles reporting Ortel’s research, attaching copies of his most recent reports.

'Big Four' firm negligent

WND reported in June Ortel charged that “Big Four” accounting firm PricewateerhouseCoopers, PWC, not only filed financial reports riddled with errors and misstatements, it neglected to verify whether the Clinton Foundation obtained tax-exempt status for its various sub-entities, including its AIDS charity, a Clinton Global Initiative likely to remain at the center of the upcoming New York City annual meeting.

PWC, he says, failed to inquire whether the Clinton Foundation has applied for and received duly issued IRS tax-exempt determinations for its various sub-entities and activities, including fighting HIV/AIDS globally under the auspices of the Clinton Health Access Initiative Inc., also known as CHAI.

He notes that there as an “Old CHAI” and a “New CHAI” that was created after Hillary Clinton became secretary of state. In addition, the foundation launched the Clinton Global Initiative and numerous foreign funds and endowments created, for instance, in conjunction with George W. Bush to raise money for the victims of Hurricane Katrina in 2005 and the 2010 earthquake in Haiti.

Ortel documents “each material deficiency in appropriate detail,” but he also poses an important preliminary question: “Did PWC, as part of its 2013 audit, establish that under applicable laws and regulations that the Clinton Foundation, including its various sub-entities and numerous charitable endeavors, many of which have been foreign based, is duly constituted as a tax-exempt organization?”

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 insists the question of whether the Clinton Foundation is validly constituted as a U.S. tax-exempt organization is “fundamental to any analysis of its financial statements.

If it is not validly constituted, he says, “the organization and its directors face substantial financial liabilities as well as other penalties that would severely impact, even bankrupt numerous parties.”

“Moreover, if the Clinton Foundation is not validly constituted as a U.S. tax-exempt organization, the legal implications for the board of directors may be severe,” Ortel writes.

In addition, there would be severe “tax consequences for those who donated to what may be a fraudulent charity, including thousands of ordinary individuals and families worldwide, as well as for wealth foundations, foreign donors, foreign governments, and possibly even the U.S. government for all contributions the U.S. government entities have made to the Clinton Foundation since inception.”

WND reported earlier this month Ortel’s conclusion that the Clinton Foundation has violated both state and federal law by soliciting “charitable donations” to fight HIV/AIDS in Third World countries for eight years, from 2002 through 2010, without receiving IRS tax-exempt authorization for that purpose.

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.

$17 million missing

In May, WND reported Ortel’s calculation that before Hillary Clinton completed her first year as President Obama’s secretary of state, approximately $17 million went missing from Clinton Foundation financial reports. It's a scheme Ortel believes was facilitated by a corporate reorganization that goes to the heart of the concerns that the foundation on Charity Navigator's watch list.

Ortel says the public record appears to confirm that the Clinton Foundation’s various components were reported as one consolidated entity to the IRS, despite the foundation’s claim that appropriate changes were made when Hillary Clinton became secretary of state.

The Clinton Foundation explained that when Hillary joined the Obama Cabinet, the foundation closed Clinton Health Access Initiative Inc., which had been operating as a program of the Clinton Health Foundation. CHAI was then re-opened it as a separate organization responsible for filing its own IRS tax Form 990, which discloses financial information to the public.

The reorganization, Ortel says, was an opportunity for the Clintons to transition from the financial statements of what he calls “Old CHAI,” ending Dec. 31, 2009, into the financials of the ‘New CHAI,’ beginning Jan. 1, 2010.

Analyzing all available financial statements for the Clinton Foundation and CHAI in the transition, including cash flow statements, Ortel has determined that approximately $17 million disappeared from CHAI.

Watch list warning

The Charity Navigator website specifies a charity will appear on the watch list “when we become aware of conduct that may affect a donor’s decision to support that charity.”

The listing for the Clinton Foundation on the Charity Navigator website further specifies:

We had previously evaluated this organization, but have since determined that this charity's atypical business model can not be accurately captured in our current rating methodology. Our removal of The Clinton Foundation from our site is neither a condemnation nor an endorsement of this charity. We reserve the right to reinstate a rating for The Clinton Foundation as soon as we identify a rating methodology that appropriately captures its business model.

The listing states that placing the Clinton Foundation on the watch list “simply means that the organization doesn’t meet our criteria,” adding that a lack of rating “does not indicate a positive or negative assessment by Charity Navigator.”

However, in her email, Miniutti cited the concerns over foreign donations, leadership and missing Form 990s.

At present there are 26 organizations on the Charity Navigator watch list, including the American Red Cross, the Corcoran Gallery of Art in Washington, D.C., the New York City Police Foundation, and the conservative Heritage Foundation in Washington, D.C.