Chelsea Clinton and Good Governance at the Clinton Foundation

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Nonprofits of all sizes and types can experience governance intrigues. NPQ has reported on any number of these—even in the past week, where we wrote about the board split at a Bronx museum and a whole board’s resignation at a small equine farm in Bend, Oregon. It is rare in these situations to get a clear view into exactly what kind of governance leadership is being employed. Not so with the Clinton Foundation. A recent release of hacked emails has provided a window into what it takes to be brave in governance leadership in the midst of an organization with adherents used to throwing their weight around.

NPQ has reported frequently over the past few years (since at least 2008) on the governance and management of the Clinton Foundation, with specific focus on the influential relationships between the foundation, Bill and Hillary Clinton personally, and the individuals, corporations, and countries who give to the foundation and its many related entities. The latest tranche of emails from Wikileaks, from former Clinton Foundation interim CEO and current Hillary Clinton campaign chairman John Podesta’s private email account, include an interesting portrait of Chelsea Clinton’s efforts to resolve potential and real conflicts of interest involving the foundation and a consulting firm, Teneo.

Teneo founding partner and president, Doug Band, was a Bill Clinton White House aide before serving as Clinton Foundation “counselor” from 2002-2012, according to his LinkedIn profile. Chelsea Clinton pushed for clarity and boundaries in foundation relationships, and received significant—and sometimes very personal—pushback from Band.

Ironically for the former First Daughter, some at the Clinton Foundation saw Chelsea as an outsider and interloper. Her involvement with the foundation began in 2011 as a board member of the Clinton Health Access Initiative (CHAI), a related 501(c)(3) entity to the Clinton Foundation. She pushed for management process changes at both CHAI and the Clinton Foundation, including data-driven decision-making and stronger policies on conflicts of interest and outside income. She joined the foundation with an impressive educational background as well as an employment history that included promotion to a team leader role at McKinsey and work at a venture capital group based in New York.

According to the leaked emails, Chelsea Clinton’s concerns were spurred by discussions she held while in London in 2011. Multiple conversations touched on the questionable use of Bill Clinton’s name by representatives of Teneo as they set up meetings with clients. “I will raise all of this and more with my father this evening,” she wrote. “Wanted to update you all in the meanwhile about my augmented concerns post London.”

Band’s responses to Chelsea Clinton’s push were fierce, including statements such as:

This is the 3rd time this week where she has gone to daddy to change a decision or interject herself in the process she says is so important to maintain.

I realize it is difficult to confront and reason with her but this could go to [sic] far and then we all will have a real serious set of other problems. I don’t deserve this from her and deserve a tad more respect or at least a direct dialogue for me to explain these things. She is acting like a spoiled brat kid who has nothing else to do but create issues to justify what she’s doing because she, as she has said, hasn’t found her way and has a lack of focus in her life. I realize she will be off of this soon but if it doesn’t come soon enough….

Amazingly, Band’s angst about Chelsea Clinton’s concerns caused him—in a single e-mail—to blame her for one foundation employee being suicidal and another having health issues, and to say that Bill Clinton was becoming a liability to Band’s consulting firm (Teneo):

Late last night, laura graham called me as she couldn’t reach my brother or her shrink. She was on staten island in her car parked a few feet from the waters edge with her foot on the gas pedal and the car in park. She called me to tell me the stress of all of this office crap with wjc and cvc as well as that of her family had driven her to the edge and she couldn’t take it anymore. I spent a while on the phone with her preventing her from doing that, as I have a few times in the past few months, and was able to reach roger and her shrink. Bruce said the stress of specifically the office had caused his very serious health issues as you both know. But I’m sure chelsea is more concerned with a mostly false story in the distinguished ny post about mf global and teneo not her role in what happened to laura/bruce, what she is doing to the organization or the several of [sic] stories that have appeared in the ny post about her father and a multitude of women over the years. For teneo, well before mf global, we have been discussing this. Its going to hurt teneo to have wjc on the adv bd any longer but we need come up with a reorg concept for the relationship with wjc and teneo that is lower key and handled privately and properly that we should discuss

It’s not clear whether Band thought Chelsea Clinton would be “off this” meaning the conflicts of interest issues or foundation involvement more generally. Of course, neither happened. A 2014 Fast Company interview included her to-do list as she became vice chair of the Clinton Foundation.

No one involved commented for Politico on the emails or their authenticity, but the lack of strongly worded denials by Podesta, Chelsea Clinton, Band, and the Foundation itself may be interpreted as implied confirmation of their accuracy.

Nonprofit governance purists will note that Chelsea Clinton’s 2011 push for changes at the Clinton Foundation were awkward because she was a board member of CHAI, a different nonprofit corporation, albeit related to the Clinton Foundation. However, Doug Band’s antagonistic stance against Chelsea Clinton is somewhat problematic because Band was not a key employee of the Clinton Foundation, according to its Form 990 filings as listed on GuideStar. Additionally, Bill Clinton served as board chair for CHAI when Chelsea joined the board in 2011, so her interest could easily be sourced to professional concern about Clinton Foundation conflicts involving the use of a fellow CHAI board member’s name.

Chelsea Clinton’s early experience at the Clinton Foundation demonstrates that pushing for attention to good governance supported by strong policies in a nonprofit organization is difficult, even when one is a well-educated and well-connected board member. Moreover, good governance reforms are difficult even when a nonprofit organization has abundant resources and is renowned for having very intelligent and aware people in leadership. Despite her advantages and those of CHAI and the Clinton Foundation, it took persistence and tenacity (as well as Bill Clinton’s support as board chair) for Chelsea Clinton to continue her board service and, ultimately, rise to become vice chair of the Clinton Foundation board in 2014. Good nonprofit governance isn’t an event; it’s a process requiring constant attention, regardless of the nonprofit in question.—Michael Wyland

  • GeorgeMcCully

    Excellent article, Michael. Shocking but supported by evidence and reason every step of the way.

  • JJAudubon

    A reasonable and sympathetic article — but let’s be clear: these are STOLEN emails probably hacked by Russian sources — and Mr. Wyland — and much of the rest of the news media — is more than happy to ignore this fact and mine the emails for whatever real value or selfish political gain they may obtain. Weyland’s extensive resume does not include a course in journalistic ethics — which admittedly may be an oxymoron. Absolutely NO ONE has confirmed the veracity of these emails. When congressional offices (like Wyland used to work for) start getting hacked and congressmen start getting embarrassed and then defeated as a result, I expect we will see some legislation about this issue. And let’s not hide behind the 1st Amendment either. If I steal your emails, do I get carte blanche? As it stands now, apparently so.