Overlooked in all the hubbub about her use of private, commercial email for official business while she was Secretary of State, Hillary Clinton has encountered an additional headache with questions concerning donations to the Clinton Foundation, or as it is now called, the Bill, Hillary and Chelsea Clinton Foundation.
In fairness, Hillary Clinton is not the first political figure in the U.S. to have encountered problems due to a charity or foundation established or run by family members or aides. The first high-profile problem of this ilk in recent years to garner major public attention was the foundation established by former House Majority Leader Tom DeLay (R-TX), which was roundly criticized as a venue for special interests to purchase influence, favor, and face-time with the Congressman, regardless of whether they had a scintilla of interest in the DeLay Foundation’s concern for foster children. When DeLay was out of Congress, donor interest in his foundation plummeted, soon driving it out of business entirely.
Other national political figures with problem charities in their environments have been Newt Gingrich (the Abraham Lincoln Opportunity Foundation and the Progress and Freedom Foundation), Rick Santorum (the Operation Good Neighbor Foundation), John McCain (the Reform Institute, though at least when he was upbraided for its use as a holding pen for his aides, he dissociated himself from it), and many others. But the issues associated with the Clinton Foundation, due its size (assets of $226m) and its visibility (due to former President Bill Clinton’s international role) makes questions about the foundation a considerable problem for Hillary Clinton in her all but inevitable quest to be elected president in 2016.
Although the history of the Clinton Foundation has hardly been controversy-free, with significant questions raised about the impact of its work in Haitian disaster relief and about the former president’s hobnobbing with some donors such as Canadian financier Frank Giustra (see his Clinton-related access to a uranium deal in Kazakhstan), the latest questions seem to be falling to Hillary Clinton because of their potential relationship to her service as Secretary of State in the Obama administration or because they raise questions about her policy stances and beliefs.
In a nutshell, there are two streams of stories about the Clinton Foundation that have implications for the former Secretary of State. One is the fact that while she served as Secretary, the Clinton Foundation received several significant donations from as many as 19 foreign governments. Although the foundation is a 501(c)(3) public charity and not required to reveal its donors, the Clinton Foundation has done so, revealing information about the size of their donations in ranges on its website, including these foreign governments:
- In the $10-25m category is the Kingdom of Saudi Arabia (plus Australia, though AUSAID, and Norway)
- In the $5m-10m category includes the Kuwaiti government as a donor (plus donations from another government agency in Australia, apparently focused on climate change, and the Netherlands and Sweden)
- Donors in the $1-$5m range included Qatar, the Sultanate of Oman, Brunei, and the United Arab Emirates (as well as more from Norway)
All told, the Clinton Foundation reports contributions from 19 foreign governments, with Germany, the Dominican Republic, Bahrain, Taiwan, Jamaica, and Canada also in the mix. Given that ranges rather than specific amounts were posted on the foundation’s website, the donations were worth between $51m and $136m. Listed as between $250,000 and $500,000 is a $500,000 donation (dedicated to Haiti earthquake relief) from the government of Algeria, made in 2010 when Algeria was negotiating with the U.S. Department of State on issues of human rights—and in the same year spent $422,000 in lobbying U.S. government officials.
By virtue of an agreement with the Department of State while Hillary Clinton served as Secretary, the Clinton Foundation was, after 2009, supposed to notify State of foreign government transactions and get an implicit nod of approval so that State and the Foundation could check on conflicts of interest. That didn’t happen with the Algeria donation, which one observer, former Congresswoman Jane Harmon, head of the Woodrow Wilson Center, suggested had simply gotten lost in the system.
There has been no insinuation of a specific quid pro quo between these governments and either Bill or Hillary Clinton. Because foreign governments cannot contribute to political campaigns (and the former First Lady is not yet an official candidate for the presidency) and because 501(c)(3) public charities like the Clinton Foundation cannot engage in partisan political activity, these donations are not backdoor versions of campaign contributions. For example, the Algeria donation was dedicated to and spent on Haitian earthquake relief. Public charities in the U.S. can and do accept donations from foreign governments.
Nonetheless, it is hard to imagine that these donors didn’t have an expectation, much like donors to any politically connected foundation, of being seen as supportive of the former First Lady and of getting access to her now or in the future. Moreover, donors such as Qatar (which has been supportive of Hamas and Hezbollah) and Saudi Arabia (whose treatment of women seems runs counter to Hillary Clinton’s repeated endorsement of women’s empowerment around the world, not to mention Saudi Arabia’s distinctively harsh method of dealing with dissidents) raises questions as to why the foundation would solicit or accept donations from these governments. As Secretary of State, Hillary Clinton by virtue of her job had to deal with all kinds of nations, but acting as a philanthropist, the foundation didn’t have to solicit or accept donations from governments whose values might have conflicted with the foundation’s.
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Bill Clinton defended the donations from foreign governments, suggesting that their money was a good thing toward helping the foundation pursue its goals, that the foundation was voluntarily revealing the names of its donors, and that governments such as the United Arab Emirates were helping the U.S. in its fight against the Islamic State (ISIL or Da’esh). It may not be apparent, but his linking of the UAE donation to U.S. foreign policy is exactly the problem Hillary Clinton faces with the donations from foreign governments. Would the foundation reject donations from governments opposed to U.S. policy? (It obviously hadn’t, in light of the relationship of Qatar and Hamas.) What if oil-rich Venezuela under President Nicolás Maduro or Sudan ruled by Omar al-Bashir had offered donations? Is the foundation implementing a foreign policy vetting process of some sort?
The other area of defense of the donations from foreign governments is that during her tenure at State, Hillary Clinton had no official role at the Clinton Foundation, so that even if grants such as Algeria’s were coming to the foundation, she wasn’t in the driver’s seat, one way or the other. True, except that it is a primary family member—her husband—who was in the driver’s seat. The barrier between her official duties as Secretary of State and his activities in getting philanthropic donations from other countries is permeable, as critics have pointed out about the charities related to many members of Congress. In any case, since 2013, the foundation has been renamed the Bill, Hillary, and Chelsea Clinton Foundation, and her role as the clearly most significant albeit unofficial Democratic candidate for president makes the foreign government donations a legitimate area of inquiry.
A second stream of the critique has been revelations of the Clinton Foundation’s relationships with a number of banks that have run afoul of U.S. government regulators. Alexandra Jaffe of CNN reported that the Clinton Foundation and its Clinton Global Initiative arm had struck partnership arrangements with a number of banks while these banks were fending off investigations or paying substantial fines. Jaffe listed a variety of “strategic partners” of CGI including Barclays (which had to pay $300m in fines for breaking sanctions against Iran, Cuba, and the Sudan, and another $450m for global interest rate rigging), Deutsche Bank (under investigation for potential Iran sanctions violations), HSBC (which paid $1.92b because it allowed drug cartels to launder money and because it did transactions for customers in Iran, Libya, Cuba, and the Sudan), and Goldman Sachs (which paid a $1.2b fine for mortgage lending infractions).
Our review of the Clinton Foundation’s listed donors reveals a number of big banks making sizable donations:
- Between $1m and $5m: Citi Foundation, Barclay’s Capital, Goldman Sachs, Standard Chartered
- $500,000-$1m: Bank of America Foundation, more Barclay’s, Citigroup, HSBC Holdings, UBS Wealth Management
- $250,000-$500,000: Banco Santander Brasil, Deutsche Bank AG, Deutsche Bank Americas, Goldman Sachs Philanthropy Fund, Morgan Stanley Smith Barney Global Impact Funding Trust
The problem for Hillary Clinton with the bank contributions, notwithstanding the banks’ regulatory problems, is that she is seen in many political circles as close to Wall Street. A spate of donations from big banks and big corporations to the foundation could add to the perception, particularly within her own populist-leaning Democratic Party, that Hillary Clinton’s DNA isn’t all that populist. Among the other corporate donors to the Clinton Foundation are these:
- $5m-$10m: Coca-Cola,
- $1m-$5m: Anheuser-Busch, Duke Energy, ExxonMobil, Hewlett Packard, Humana, Microsoft, Pfizer, Procter & Gamble, Dow Chemical, Boeing, the Walmart Foundation (as well as the Walton Family Foundation), Toyota,
- $500,000-$1m: Alibaba Group, Chevron, General Electric, Google, Monsanto, News Corporation (Murdoch), Allstate, Harrah’s,
- $250,000-$500,000: AIG, Freeport McMoRan, McDonald’s, Walmart
That is a hefty list of companies that might be interested in finding a friendly ear in the White House in 2017. Some of them, such as ExxonMobil, are seen by progressive activists as inimical to concerns about the impact of fossil fuels on global warming. Others, like McDonald’s and Walmart, are frequently described by activists as exemplars of low wage, non-union shops. To the Clinton Foundation, the bank and corporate donors are seen as having the scale as funders and partners “to make the biggest impact,” as one foundation defender explained. The foundation believes that the track records of banks and corporations having been investigated and penalized by U.S. government regulators shouldn’t disqualify them from making a positive contribution to the foundation’s priorities.
A foundation “talking points” email that made its way to press outlets instructed Clinton defenders to highlight the foundation’s “ground-breaking, life-changing” global impact, that it is a false choice to suggest that individuals and corporations can’t separate their political priorities from their philanthropic giving, and that its voluntary transparency is a significant positive difference about the Clinton Foundation. The emphasis is that the foundation is simply that, an entirely philanthropic endeavor. Her former campaign chair, now Virginia governor, Terry McAuliffe, added, “If your criticism…is that she raised too much money for her charity to help people around the globe, OK, I’ll take that.” But that statement, especially given that McAuliffe is a former board member of the foundation, puts Hillary Clinton back into the middle of the foundation’s fundraising strategies when she was serving full time as Secretary of State.
Money, even in philanthropy, is not a purely philanthropic endeavor. It buys access, which goes both ways. For example, the Foundation chose not long ago to invest its assets through Summit Rock Advisers, where one of Chelsea Clinton’s best friends is a managing director. That person’s husband ended up working for the hedge fund created by Chelsea’s husband, Marc Mezvinsky.
In the wake of the foreign funding news, it appears that former Health and Human Services Secretary Donna Shalala, recently the president of the University of Miami, has been tapped to be the next CEO of the Clinton Foundation. Having weathered devastating scandals of improper contributions to the University of Miami sports teams, Shalala may be what is needed to clean up the apparent tone-deafness of the Clinton Foundation fundraising. She will be taking the place of Eric Braverman, the CEO who left (or perhaps was eased out of) the Clinton Foundation recently. Ironically, Braverman had been recruited, and may have been ousted, partly for his reported agenda of focusing on the foundation’s processes for handling whistleblower complaints,
Truth be told, the messy charity involvements of John McCain, Rick Santorum, and even Newt Gingrich never figured into their presidential campaigns (DeLay was never going to be a presidential candidate and Mitt Romney’s Mormon-focused foundation draws on family money). Clinton spokespersons and surrogates are dismissing the foundation questions with “is this all they got?” comments about her potential opponents, but it may not be that easy. Unlike the small but compromised fundraising of these other politicians’ charities, the Clinton Foundation is big, with a quarter-billion in assets, a track record of having raised $2 billion, and influence with power brokers around the world. It is where difference of size really is difference of kind when it comes to the potential significance of the Clinton Foundation questions. This time around, in the 2016 presidential campaign, Hillary Clinton could find her family’s foundation, increasingly dependent on outside contributions from big corporations and foreign governments, to be a campaign albatross.