The Clinton Foundation’s OTHER Ethics Problem—And An Ethics Trainwreck Update

clinton_foundationEven if it weren’t being used for what looks like influence peddling…even if the foreign contributions to it didn’t create a textbook “appearance of impropriety,” which is prohibited for a Secretary of State…even if Hillary Clinton’s unilateral destruction of thousands of e-mails makes her surrogates’ (and imagine: one of those surrogates is an ABC new show host, and the network sees nothing wrong with that) argument that there’s no “smoking gun” evidence of wrongdoing a shining example of gall for the ages…there is another ethics problem with the Clinton Foundation, one that is beyond reasonable debate, and one that even the most shameless Clinton acolytes won’t be able to deflect by attacking the messenger.

It’s an unethical foundation, by well-established non-profit standards, and that has nothing to do with politics.

But first, a digression on what is now a bona fide ethics train wreck: now officially known here henceforth as The Hillary Clinton Presidential Candidacy Ethics Train Wreck.

All aboard!

The suspicious sequence of events and money exchanges that resulted in a Russian government entity owning a large American uranium mine was all over the Sunday Morning talk shows. I could write posts on a half dozen related issues: it was an ethics bonanza. I picked one. [One of the masterful Clinton tactics through the years has been exploiting scandal fatigue. If you focus on each and every sleazy, deceptive and suspicious thing Bill and Hillary are involved in, you automatically look, and are susceptible to being dismissed by their defenders as, obsessed with “getting” them, a Clinton hater. It doesn’t matter that any one of the episodes would be treated as serious if it involved any other high level public figure. The sheer audacious volume of this couple’s machinations provide its own protection. I’ve felt it here, as I have before. The Clintons are a long-running, one family ethics plague on the culture, but if you give them the criticism and analysis their deeds warrant, you risk being seen as boring and repetitive, appearing to be biased, and vulnerable to the accusation of having an “anti-Clinton agenda, ” which then minimizes the effectiveness of your critiques. Thus you minimize the criticism, and that gives Bill and Hillary more room to maneuver for power and wealth. It’s brilliant, really.] I could have picked many others, but the sight of former Clinton press secretary and insider George Stephanopoulos trying to discredit “Clinton Cash” author Peter Schweizer because of his past ties to the Bushes was too much. Later I read a comment on another website that marveled at the way the news media shrugs off such an outrageous conflict of interest when Democratic idols are involved. The commenter asked us to imagine Ron Ziegler being assigned the job of questioning Woodward and Bernstein about their Watergate investigative reporting. It’s a fair comparison.

The day got worse from there, but I had already used up my self-imposed limit of Hillary ethics posts. The next individual to mark herself as a public liar for the Clintons—not for the first time—was Democratic operative Donna Brazile. “This Week With George…” trots out Brazile, who is a Democratic party mouthpiece, bought and paid for, as if she is an objective and independent analyst of the news week after week. She is so predictable that you can write down her position in advance; she is incapable of ever finding fault with any progressive politician, and she works to deceive the audience rather than enlighten them, which should be her job. This, however, was Donna’s nadir. She sputtered…

“Well, George, I haven’t read the whole book—I’m sure it’s still being rewritten somewhere because the newspapers and other publications are already disputing some of the facts and the claims in his book. But there are more drippings in this book than juice or sauce and what the campaign needs to do—and they did it last week—is go ahead and respond to these allegations. They’re scurrilous. We’re going to see more of them as the campaign goes along but respond to them and continue to reach out to voters and ignore all of this background noise. That’s what they need to do.”

Lies.

The raw facts under discussion, confirmed by the New York Times and the Washington Post, are not “allegations.” Nor is it “scurrilous” to point out what looks like a quid pro quo sequence involving a former President and a Secretary of State that involves millions of dollars being sent by foreign interests to a foundation with the Clintons’ names on it. Such investigative reporting is, in fact, responsible citizenry. Calling another substantive instance of the Clintons playing fast and loose with promises, national interests, rules and laws “background noise” marks Brazile—and this is always the choice—as either naive to the point of infantile or a conspirator. The statement she made would justify a responsible network banning her as a pundit on either basis.

Then the next panelist weighed in…Newt Gingrich? Was this a joke, or just an effort to make certain that the primary Clinton critic on the panel could be discounted as a brazen hypocrite—you know, like George Stephanopoulos? Gingrich himself had a dubious foundation that he used for shady political purposes—am I the only one who remembers that? Come on:

1. Newt has no business criticizing legally questionable uses of non-profit entities by others political figures. Here’s how a philanthropy journal described Newt’s shenanigans in 2006:

“Gingrich’ s troubles with philanthropic institutions—namely the Progress and Freedom Foundation and the Abraham Lincoln Opportunity Foundation, plus his political action committee (GOP AC) 3 —sound like the philanthropic precursors of how Jack Abramoff blended partisan political activity and tax-exempt charity in the form of the Capital Athletic Foundation.”

2. ABC putting him on the panel was irresponsible, if not sinister.

3. Stephanopoulos had an obligation to remind viewers of Newt’s hypocrisy, but then maybe Newt would have reminded viewers of George’s Clinton insider past. I guess it’s like two married rivals meeting each other in a gay bar.

Over at Fox News, reliable Clinton guard dog Lanny Davis—god, what must they pay him to debase himself this way?—was going into rationalization overdrive as the Clinton’s Designated Weasel. He really got deep into the List, like when he said that the Russian uranium story was “smoke and mirrors that totally miss the good deeds that [the Clintons] have done over the years.”  What the heck do the “good deeds” of the Foundation have to do with the story? Does Davis really expect everyone to believe that Russia paid Bill Clinton $500,000 (which means that they paid Hillary $500,000, at least the way we look at income in my house) for a speech because of the Foundation’s good deeds, and not because it was seeking good will from the State Department and his wife? That single sentence embodies the Rationalizations #11. The King’s Pass, 11. (a) “I deserve this!”, 13. The Saint’s Excuse, 14. Self-validating Virtue, and 21. Ethics Accounting (“I’ve earned this”/ “I made up for that”)…impressive, Lanny! But we shouldn’t be surprised: if your job is spinning misconduct, rationalizations are your bread-and-butter. Then Lanny started showing off, arguing that a $2.5 million contribution was too small to matter (#22. Comparative Virtue) and that there were questions about Jeb Bush’s e-mails too (#2. The “They’re Just as Bad” Excuse, and, of course, #1 Everybody Does It.)

Digression complete.

Finally, here is the other problem with the Clinton Foundation: the independent, professional non-profit evaluating bodies have judged it to be, in the words Bill Allison, a senior fellow at the Sunlight Foundation, “a slush fund for the Clintons.” The Sunlight Foundation is a government watchdog group with progressive Democrat ties—George, Lanny and Donna can’t accuse it of being funded by the Koch brothers. No, it just cares about integrity.

This is res ipsa loquitur territory. The Foundation, by the standards legitimate, ethical charities and non profits hold themselves to, is irresponsibly run and does not make sufficiently charitable use of its donations to justify its non-profit status. A non-politicized IRS would be breathing down it’s neck, rather than stalling small Tea Party groups.

Look:

1. The Foundation took in more than $140 million in grants and pledges in 2013 but spent just $9 million on direct aid. That’s terrible.

2. The group most of its money on administration, travel, and salaries and bonuses, with the large sums going to family friends.

3. On its 2013 tax forms, the most recent available, the foundation said it spent

  • $30 million on payroll and employee benefits;
  • $8.7 million in rent and office expenses;
  • $9.2 million on “conferences, conventions and meetings”;
  • $8 million on fund-raising; 
  • $8.5 million on travel, including first-class air flights for Bill, Hillary and Chelsea.
  • That’s $84.6 million in “functional expenses” on its 2013 tax return. 
  • The $64 million left over represented pledges rather than actual cash on hand.

Non profit groups—I do annual programs for one of them—say that responsible, trustworthy non-profits spend at least 75 percent rate of their donations on their stated missions. The Clinton Foundation misses that by so much—another issue is fundraising expenses compared to money spend on the mission, which in this case is $8 million on raising funds and only $9 million going to beneficiaries of the charity–that the Charity Navigator, which rates nonprofits, now refuses to rate the Clinton Foundation because its “atypical business model . . . doesn’t meet our criteria.” The Foundation does qualify for the organization’s “watch list,” which warns potential donors of questionable charities.

“Non Profit Quarterly” also published  a damning, though fair and objective, assessment of the Foundation.

It will be particularly amusing when Hillary Clinton, who has used the Foundation and the leverage between it and her influence in the Obama Administration to become fabulously rich, preaches about income disparity and CEO salaries. Non-profits are supposed to restrain themselves when it comes to executive compensation, since every penny they pay to management is a penny taken from the mission and its needy beneficiaries. Not this non-profit!  Eric Braverman, a friend of Chelsea Clinton from when they both worked at McKinsey & Co., was hired as CEO of the Clinton Foundation at a reported $275,000 with benefits and a housing allowance from the nonprofit for just five months’ of work in 2013.Then his salary was increased to $395,000. Nine other executives received salaries over $100,000 in 2013, tax filings show.

There is no justifying this, but the laughable release from the Clinton Foundation’s acting CEO Maura Pally  in the wake of the “Clinton Cash” revelations tries. Excuse a few arch comments from me, in bold, as we read along with Ms. Pally…

Over the past few days, many questions have been raised about the Clinton Foundation, its initiatives, and the financial support that allows us to do the uniquely impactful philanthropic work that we do at home and around the world. That’s a straw man up front. The questions are about how the Foundation is recieving funds, however they are used, as a way to curry favor with the woman whose name it bears.

Without question the Foundation’s accomplishments stand on their own. From fighting obesity by helping create healthier learning environments for more than 16 million students; to working to combat one of our greatest global threats, climate change; to lowering the price of lifesaving antiretroviral drugs that have benefited more than 9 million people fighting HIV/AIDS; one thing is clear, the Clinton Foundation has not been afraid to take on big challenges and see real results.  Back to The Saint’s Excuse. Nobody questions whether the Foundation does good deeds, or has a worthy stated mission. The questions involve the political and self-enriching uses the Foundation’s operations appear to support as well. If they involve pay-offs and corruption, it doesn’t matter how much good the Foundation does.

Just as important as the results we see, is how the Foundation has transformed philanthropy into a collaborative effort by bringing NGOs, local stakeholders, government officials, private sector actors, and others together to maximize their collective investments. It seems logical, but fifteen years ago, that just wasn’t how philanthropy was done. Let’s ask the Council on Philanthropy if this is a positive development.

As the Foundation’s impact has grown, so too has its commitment to transparency. When Hillary Clinton was appointed Secretary of State, we took unprecedented steps to avoid potential conflicts of interest by going above and beyond what is required of any philanthropy and instituted voluntarily annual disclosure of all of our donors on our website. We also established a policy around the foreign government contributions we accept, recognizing that in order to continue our life improving work we rely on the contributions of government, as is the case with most large scale global charities. We are incredibly transparent, except for those foreign contributions we somehow neglected to mention when they violated Hillary Clinton’s signed agreement not to accept them.

Today, our donor disclosure and foreign government contributor policy is stronger than ever. Classic deceit, a Clinton specialty, reminiscent of New Jersey being named the most ethical state government because of its policies. See, policies don’t make an organization ethical. It’s how those policies are followed and executed that matters—as Pally surely knows. Since Secretary Clinton decided to run for President, we have committed to disclosing all of our donors on a quarterly basis.  In addition, we announced that we will only accept funding from a handful of governments, many of whom the Foundation receives multi-year grants from, to continue the work they have long partnered on. Those governments,, however, have included recipients of State Department favors, supporters of terrorist organizations, and nations that abuse and subjugate women.

[ I’m going to omit the intentionally convoluted discussion of  the foundation project that received the $2.5 million dollar donation, because it has nothing to do with the ethics issues. A contribution to a foundation bearing an individual’s name enriches that individual. When the donor has interests that that individual could, may or the donor thinks could or may influence, that is a potential bribe, is an appearance of impropriety, and is corrupt, possibly illegal. All of the explanations about how the money really didn’t stay with the foundation are meaningless to the issue at hand, and spin.]

…So yes, we made mistakes, as many organizations of our size do Everybody does it!  but we are acting quickly to remedy them, and have taken steps to ensure they don’t happen in the future. Now that Hillary is running for President, the deals are done, and we have been caught violating basic non-profit management principles. We are committed to operating the Foundation responsibly and effectively to continue the life-changing work that this philanthropy is doing every day. I encourage you to read more about that good work at http://www.clintonfoundation.org.The unavoidable and unpleasant fact for Lanny, George and the Clinton enablers is that Bill and Hillary Clinton have been overseeing a large non-profit organization that has misused funds, under-performed its mission, and served as a slush fund to enrich or otherwise benefit them, their daughter, their friends, political allies and foreign organizations in breach of rules, policies, ethical values and very possibly laws. By any objective standards, this should disqualify her to oversee the government of the United States, or to be trusted by the public.

____________________________

15 thoughts on “The Clinton Foundation’s OTHER Ethics Problem—And An Ethics Trainwreck Update

    • I think you might need to up your quota. At least as long as she’s the only official candidate for the democratic presidential primary.

      You might want to consider dropping a hard quota entirely. Otherwise, what will you do on a day where two scandals hit at once? A quota just enhances the scandal fatigue.

    • some comic relief is in order, Chelsea ( she has a recent acquisition of a $10 million NY apt BTW) recently made a speech (paid 75 grand I believe
      which she donated to the *Charity*) anyway she made a speech, to unable to find jobs
      millenialls, where she actually said , “I have tried to care about money”!!!

  1. Jack: You mentioned that a legitimate foundation channels at least 75% of its funding into its stated purpose. In actuality, it’s hard to find one these days that even makes it to half! This often includes venerable old charities that have become corrupted in our modern era…. such as the American Red Cross. I’ve found that one of the best rules of thumb in determining the worth of a charity/foundation/etc. is determining how much the top executives are paid. If they earn half a mill or more (often the case) then you can pretty well assume that the bulk of your donation is going for their vacations and cocktail parties. The worst tend to be the “Hollywood Charities”. But, as you point out, you’d have to search a while to find one as openly corrupt as the Clinton Foundation. Not that they aren’t there, by any means. They simply aren’t as “in your face” as the Clintons tend to be. The Teflon Two just have a way of getting away with it.

    • Try UMCOR. 100% of donated money goes to the designated program. How can they direct 100% of your donation to direct action? Other people paid the overhead costs. The United Methodist Committee on Relief is sponsored by the United Methodist Churches of the world. The United Methodist churches pledge a part of their yearly budgets (the dreaded apportionments) to pay for the staff, warehouses, shipping, etc required by UMCOR projects. Many of the workers are United Methodist volunteers. Because the churches have taken care of all the overhead, you donation goes totally and directly to aid. If you want to donate to help the victims of the Nepal earthquake, UMCOR would be my first recommendation. This from a disgruntled, ex-Methodist.

      • Thanks for noting that, Michael. I might also point out that charities sponsored by the American Legion and the Veterans of Foreign Wars rank high in this regard as well.

  2. I heard an interesting take on this from David Brooks. I don’t really like Brooks that much, but what I do like about him is that he always discusses these issues in a measured tone — no frothing at the mouth like you sometimes see on these Sunday shows.

    Anyway, his view is that this appears to be a scandal, and should be treated as such — but he went on to say that when you talk about the Clintons (or any other elite/wealthy politician), it’s not too hard to play connect the dots to actual or perceived favors. Because there are only so many people who play at this level, it’s pretty hard not to bump elbows with people who are going to benefit directly or indirectly just by being in the same league.

    Another point — and I certainly have seen this first hand even though I will never be anywhere near this elite of a circle — is that you don’t actually ask for favors, Those favors are presumed but you never want to have an actual trail. That donation in year one might not pay off until year 10, but that’s how the game is played.

    • Beth, that is an interesting take, and from where I sit, pretty well accurate. However, having a limited number of players does NOT mean that there should not be ethics in the game, nor, if there are ethics, that they should be ignored. Like you, I have seen the second point personally, with the money being presented with a raised eyebrow, or a smirk…something that says “You owe me now; I’ll collect on that debt one day, count on it.” Again, the EXPECTATION of repayment is what causes the ethics-fail, not the overt asking.

      • I agree completely. But until we get rid of the oligarchy controlling US politics, I think we are going to see this again and again.

    • Yes.
      And it was pointed out that Gov. McDonnell was sent to jail on exactly this presumption based on “circumstantial” evidence. Newt, I hate to say, was right: at a lower level, the Clinton quid pro quos would support indictments.

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