NEW YORK – The Clinton Foundation faces a deadline for refiling at least five years of annual returns, prompted by a Reuters review that found errors in how donations from foreign governments were reported.
The refiling must be completed by Nov. 16, the date this year under federal law for filing 2014 audited financial statements and other required regulatory filings, including the IRS Tax Form 990. It's also the deadline for 2014 filings under the even stricter charity laws in states such as New York and Georgia.
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Wall Street analyst and investor Charles Ortel, whose extensive research into Clinton Foundation operations has led him to characterize the Clinton family charity as “a vast criminal conspiracy,” says that if the Clinton Foundation refiles properly, it will have to do much more than submit returns from the past five years.
“To file 2014 returns correctly, the various Clinton Foundation entities will have to make radical amendments to returns filed for years 2001 through 2013, not just for the five unspecified years for which the Clintons now admit the filings were incorrect,” Ortel told WND.
“The problem is that all Clinton Foundation audited financial statements and supporting disclosures filed from 2001 through 2013 are false and materially misleading,” he alleges.
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Ortel contends the "magnitude of the Clinton Foundation fraud is too big to ignore."
"It involves no less than $2 billion that Clinton Foundation entities disclose was raised from 2001 through 2013," he said, noting other undisclosed amounts could come to light under closer scrutiny.
He called the foundation "a giant, cross-border, financial fraud that extends to all 50 states and to more than 75 countries worldwide."
Millions of dollars missing
WND reported in May Ortel’s analysis that before Hillary Clinton completed her first year as President Obama’s secretary of state, $17 million went missing from Clinton Foundation financial reports.
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Ortel documented that after Hillary Clinton joined the Obama Cabinet, the foundation supposedly disbanded an effort that it claimed had been authorized to fight HIV/AIDS globally as a Clinton Foundation program. It then created the Clinton Health Access Initiative Inc., known also as CHAI, as a separately constituted operating unit under the Clinton Foundation umbrella.
Under the reorganization, CHAI as a separate organization should have been responsible for filing its own IRS Form 990 to disclose financial information to the public, even though, in theory, it was tasked with continuing the global efforts to fight HIV/AIDS that had been assumed by the previous operating entity.
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.
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“Clinton Foundation trustees, past as well as present, remain on the hook for ensuring that all Clinton Foundation entities are ‘consolidated’ into the various reports that must be filed at the latest on Nov. 16, concerning 2014,” he continued.
“To do so correctly, the Clinton Foundation must amend and explain corrections to all filings concerning calendar years 2001 through 2013,” Ortel said.
“This is impossible to do without confessing to multiple felony crimes."
WND reported in April Ortel’s conclusion the Clintons appear to have siphoned off tens of millions of dollars annually from funds the foundation has received from a United Nations-sponsored program that uses levies on airline tickets to help HIV/AIDs victims in the Third World.
Ortel says the program through the U.N. group UNITAID used the Clintons’ international prestige to “leverage” manufacturers of prescription quality drugs and health-care products and sell them to developing countries at a discount price to combat HIV/AIDS.
To put in perspective the possible magnitude of the fraud, the French Civil Aviation Authority estimates the levy imposed on airline tickets by the French government alone amounted to more than $1 billion euros in the approximately six years the UNITAID program ran, from 2006 through Jan. 23, 2013.
Not only did the Clintons skim tens of millions of dollars off the UNITAID fund, Ortel also claims that CHAI likely worked with pharmaceutical companies and others to distribute “drastically substandard” generic antiretroviral drugs to Third World countries that had no chance of helping HIV/AIDS patients.
Ortel believes that once his findings have been studied, federal and state authorities within the United States as well as international legal authorities will have no choice but to initiate multiple criminal investigations into allegations of “private inurement,” the crime of enriching oneself through a nonprofit organization.
He believes it would lead to criminal indictments for the Clintons, numerous family associates and big-name donors.
He explained that the burden of proof, under U.S. state and federal law, as well as under international law, will fall on the Clintons to demonstrate that their foundation was not operated as a systematic fraud designed to enrich themselves and their associates.
Moreover, Ortel maintains, the Clinton Foundation, in gross violation of applicable laws, apparently authorized itself to apply tax-deductible status to “charitable donations” given for purposes beyond the purposed of building the Clinton library and research center.
“Current, escalating problems at Clinton Foundation entities originate in 2001, when Bill Clinton and allies began operating extra-legal and supposedly ‘charitable’ operations that were never appropriately authorized by the IRS or described in numerous published filings illegally prepared but made available to government regulators and the general public inside and outside America,” Ortel said.
After an exhaustive search of all relevant documents available online, Ortel 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 received IRS tax-exempt authorization to fight HIV/AIDS only after submitting what Ortel believes was a materially misleading and, therefore, fraudulent application in 2010, some 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 said.
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 letter specifies the precise charitable purpose for which the foundation is allowed to solicit donations on a tax-exempt basis.
The Clinton Health Access Initiative Form 1023 dated Dec. 31, 2009; the determination letter dated March 15, 2010 (neither is posted on the Clinton Foundation website); 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.
Ortel told WND that accounting irregularities require amending and correcting IRS forms and audited financial statements back to 2001, because of numerous material errors.
“For one thing, state laws require use of GAAP (Generally Accepted Accounting Practices) based accrual accounting, consistently treating all related entities and transactions with 'disqualified persons,' i.e., insiders,” Ortel pointed out.
“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, PricewaterhouseCoopers, one of the “Big Four” accounting giants, 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.
“These gross, repeated and ongoing violations of law harm all donors and may place a cloud over all American charities that operate internationally,” he said.
The key problem, Ortel said, is that financial results for constituent elements within the Clinton Foundation consolidated financial statements were never properly verified by any of the Clinton Foundation auditors, BKD, MHM or PWC.
According to Ortel’s analysis, the largest single contributor to the Clinton Foundation turned out to be UNITAID, with the Geneva-based organization apparently sending $566 million to the Clinton Foundation from 2006 through 2013.
“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 to detailed questions that 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 noted.
“What evidence did PWC auditors review and how thoroughly did they investigate?” Ortel asked. “Did PWC examine all 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 said 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.”
“Even worse,” he asserted, “Clinton Foundation trustees have illegally held out the main Clinton Foundation and the Clinton Health Access Initiative have been authorized, in advance, by the IRS to fight HIV/AIDS internationally, which certainly was not the case.”