It is unlikely the Obama administration will investigate the Clinton Foundation – or the Clintons -- over the numerous charges of unethical behavior that have surfaced in recent weeks. Consequently, it is up to investors to rein in this unsavory colossus – stockholders in donor companies like Coca-Cola, which has given between $5 and $10 million to the group, whose money is funding the Clinton political empire.
Not a week goes by that we don’t learn of another whopper spun out by Team Clinton. Most recently, it emerged that Mrs. Clinton’s 2014 financial disclosure form failed to include the income from five speeches she made in 2014 for which payment was made to the Clinton Foundation.
Why would she have donated the fees to the Foundation? Because that non-profit giant is the beating heart of the Clinton empire, sucking up donor money that funds endless campaigning, first-class travel, shady business dealings and temporary employment for colleagues waiting for their next “at-bats.”
The overlap between the Clinton political machine and the foundation is undeniable. An analysis by The Washington Post found that “Nearly half the major donors who are backing Ready for Hillary…as well as half the bundlers from her 2008 campaign, have given at least $10,000 to the foundation…”
Personnel managing the foundation include many past political aides to Hillary and Bill. As The New York Times acknowledged in 2013, an examination of the record reveals “just how difficult it can be to disentangle the Clintons’ charity work from Mr. Clinton’s moneymaking ventures and Mrs. Clinton’s political future.” For instance, Dennis Cheng was a fund-raiser during her Senate campaign, then finance director for her 2008 run, next a senior aide to Mrs. Clinton during her term at State, until he moved to head the foundation endowment drive when the former First Lady resigned from the government. Today, he is the finance chair for her presidential campaign.
This week it came to light that while acting as Secretary of State, Mrs. Clinton had carried on an email correspondence with long-time confidant Sidney Blumenthal about business opportunities in Libya after the toppling of Qaddafi. Specifically, he and some associates angled for contracts with the transitional Libyan government to build floating hospitals and schools that would have required State Department permits. This is a vintage Clinton play; close associates leaning on Hillary or Bill’s prestige to pursue financial goals in a third-world country.
While Blumenthal was exploring opportunities in Libya, he was, of course, employed by the Clinton Foundation embodying, as The New York Times relates, “the blurry lines between business, politics and philanthropy that have enriched and vexed the Clintons and their inner circle for years.” The foundation is especially mushy – under cover of philanthropy it has kept Bill and Hillary center stage for the past 15 years, and kept Hillary’s presidential hopes alive. It has also been a gigantic personal money-maker for the Clintons, in part because of numerous shady business deals with foreign companies, (laid out exquisitely by Peter Schweizer in Clinton Cash) some of which appear to have hinged on favorable treatment from Mrs. Clinton’s State Department.
Why do domestic companies donate to the Clinton Foundation? It pays off. As Secretary of State, Hillary Clinton promoted U.S. corporate interests around the world. Efforts on behalf of Exxon Mobil, Wal-Mart, Microsoft, Boeing and Chevron, to name but a few, were nearly always rewarded with sizeable gifts to the Clinton Foundation. In the case of Boeing, for instance, Mrs. Clinton made a personal trip to Moscow in 2009 to encourage Russian purchases of the firm’s airplanes. Seven months later, according to The Wall Street Journal, Moscow ordered 50 Boeing 737s, costing nearly $4 billion. Two months after that, Boeing made its first-ever gift to the Clinton Foundation, of $900,000. More donations followed.
Mrs. Clinton’s support of foundation donor Cisco is equally interesting. The Internet equipment company came under heavy criticism in 2008 and 2009 for having helped engineer China’s Great Firewall, used by authorities in that country to suppress dissent. In spite of her advocacy for freedom of expression in China, Mrs. Clinton’s State Department gave Cisco a prestigious “Award for Corporate Excellence” and rewarded Cisco CEO John Chambers with a prime speaking role (and major public relations boost) at its 2010 ‘Turning Ideas into Action’ annual meeting. Cisco has donated between $1 and $5 million to the Clinton Foundation.
Boeing and Cisco are the tip of the iceberg. An astonishing 60 domestic and foreign companies that sought help from the Clinton State Department gave over $26 million to the Clinton Foundation. Perhaps investors will cheer the use of charitable dollars to further company business. But, like skirting the Foreign Corrupt Practices Act, such quid-pro-quos are unethical, and might ultimately land a corporation in hot water.
Many companies, of course, give to prominent charities in order to burnish their brand; however, such gifts normally require considerable investigation of how the money is used and the effectiveness of the charity. Given the questionable management of the Clinton Foundation -- the fact that for years the group took in buckets of cash but still managed to run at a loss, questions about the foundation’s lavish spending, sloppy bookkeeping and tax records, and evidence of self-dealing -- it is doubtful that any corporation would choose it as an important vehicle for good works. In 2013, just 15 percent of monies spent went towards “direct program expenditures.” In 2013 the Better Business Bureau determined that the Clinton Foundation did not meet its accountability and transparency requirements.
That the Clinton Foundation fails the test is not surprising. Rather than providing hands-on services, the organization is set up to be a conduit for money flowing to various partnerships around the globe; opportunities for leakage abound. The lavish fund-raising events which shine a rosy spotlight on Bill and Hillary actually lost money in 2013; receipts for the “London Gala” and other dinners and events totaling over $15 million fell short of expenses by almost $900,000.
In 2013, when Mrs. Clinton rejoined the enterprise, and simultaneously began to raise money for a presidential bid, costs associated with fundraising skyrocketed. The foundation’s travel expenses related to fundraising rose 39 percent, consulting fees were up 76 percent, and conferences and events costs nearly tripled. Where one effort starts and the other ends is impossible to determine, especially since many targeted supporters for the campaign – like Elizabeth Frawley Bagley, Susie Tompkins Buell, Casey Wasserman and Cheryl and Haim Saban have been multi-million dollar donors to the foundation.
It is outrageous that no government agency, not the IRS nor the FBI, has determined that the Clinton Foundation warrants scrutiny. That should not deter stockholders from pushing back against the Clinton’s self-dealing. Activists might not kill the beast, but they could slow it down. Shareholders are increasingly demanding a voice today – in how corporations invest their pension funds, how they deal with activists and how they pay their CEOs. They should also have a say in what kinds of charities companies support. And which politicians they bankroll.
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