Clintons
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If you have spent any time with Bill or Hillary Clinton in person, as this writer has, you’ll get this point: Whether you like or hate their politics, you cannot deny their brilliance. The former president is a phenomenal, freewheeling thinker, able to integrate knowledge from multiple sources with insight that puts him a level above the crowd. His spouse, the former senator and Secretary of State and probable presidential candidate, possesses a steely, directed brilliance that is in sharp contrast with her more extemporaneous husband. Even on their individual merits, were they not the most powerful political couple in the United States, you would want to hear them talk—and maybe even pay them to do so.

But speaking fees for Bill and Hillary Clinton—and now their daughter Chelsea as well—are a cause for nonprofit and philanthropic concern, particularly with nonprofit entities that pay huge sums, six- and seven-figure fees to bring the Clintons to the dais. The news reports about the speaking fees and related political blowback regarding the Clintons have been increasing geometrically:

  • Between January 2001, when he left office, and January 2013, when Hillary Clinton left her position as Secretary of State, the former president has received $104.9 million in fees for delivering 542 speeches. The largest source of his speaking gigs? Wall Street banks and other financial services firms, which recruited the former president for 102 speeches and paid him $19.6 million.
  • In some cases, the former president’s speaking fees have been astronomical. Last year, the Jewish National Fund, the Israeli organization that owns or controls a significant part of that nation’s actual real estate, offered to pay President Clinton $500,000 in return for the president’s speaking at Israeli President Shimon Peres’s 90th birthday celebration. After an outcry in Israel and in the U.S., the JNF withdrew its half-million-dollar offer. That sum, though, is a quarter-million lower than the highest fee reportedly paid to President Clinton: $750,000 for an address to the telecom company Ericsson in Hong Kong.
  • The Washington Post’s Philip Rucker reports that Hillary Clinton’s average speaking fee tops $200,000, with the former Secretary of State accepting lower fees or waiving them on occasion for black-tie society gigs.
  • For a speech earlier this year to students and faculty at the University of California at Los Angeles, Hillary Clinton was paid $300,000, the money coming from a private trust established by Scope Industries CEO Meyer Luskin to fund a lecture series at the school. Two years ago, the UCLA paid Bill Clinton $250,000 for a speech.
  • The Post further reported that Hillary Clinton has scored at least $1 million this year in speaking fees for speeches at the University at Buffalo, Colgate University, and Hamilton College in New York, as well as Simmons College in Boston and the University of Miami in Florida—each declining to reveal how much they paid the former Secretary of State-- plus $251,250 from a donor fund for a speech the University of Connecticut and the $300,000 for the UCLA gig.
  • At the University of Nevada, Las Vegas, the UNLV is paying Hillary Clinton $225,000 for speaking at its annual fundraising dinner, scheduled for October 13th. The foundation is charging people to hear the former Secretary of State as much as $20,000 for some tables ($18,000 of that cost tax deductible) and has sold $353,000 in “high dollar seats.” This would give UNLV a profit from Clinton’s speech notwithstanding the high fee, though lower than the $250,000 it paid the former President in 2012 to speak to 992 guests. UNLV student government leaders have split on this issue, with some calling for Hillary Clinton to donate her fee to the university as a charitable gesture.
  • In the wake of questions regarding Hillary Clinton’s self-acknowledged less than artful contention that she and Bill left the White House “dead broke,” family spokespersons revealed that daughter Chelsea Clinton, in addition to earning $600,000 a year as a special correspondent for NBC News, where she is rarely ever seen on camera, takes in as much as $75,000 for her speeches.

The Clintons are able to command speaking fees that are close to unparalleled among politicians and celebrities. After leaving office, former Vice President Al Gore got $156,000 for a half-hour lecture in London. Former President George W. Bush’s typical speaking fee is apparently $110,000. Dick Cheney’s fee per address is about $75,000 and his daughter Liz’s around $20,000. Former presidential candidate Mitt Romney makes between $40,000 and $60,000 for his appearances. In general, the Clinton fees on the political celebrity speaking circuit are like “max contracts” for players in the NBA; everyone else can only hope someday to see those numbers.

The criticism of the Clinton speeches, particularly Hillary Clinton’s, is that she is taking in huge sums as she marches toward her all but inevitable presidential campaign, and that many of these huge fees are coming from colleges and universities which generate their income through charitable donations and tax revenues. Because Clinton is not yet an official candidate, her income from these speeches and her use of the fees does not have to be declared in the financial disclosure reports that are required of candidates.

Hillary Clinton defended her fees in an interview with ABC’s Ann Compton. All of her speaking fees (and apparently Chelsea’s as well) are turned over to the Bill, Hillary & Chelsea Clinton Foundation, the public charity that the family controls and operates. The high-profile foundation has a laudable mission: “to improve global health, strengthen economies, promote health and wellness, and protect the environment by fostering partnerships among governments, businesses, nongovernmental organizations (NGOs), and private citizens to turn good intentions into measurable results.” Among its programs are the Clinton Global Initiative; the Clinton Guistra Enterprise Partnership, geared to creating, scaling, and replicating social enterprises in the developing world—a special interest of Canadian financier Frank Giustra, who very controversially used his connection to President Clinton (helped by a $100 million donation to the CGI) to land face time with Kazakhstan’s brutal dictator, Nursultan Nazarbayev, to negotiate a lucrative uranium mining deal; the Clinton Foundation in Haiti; many international health initiatives; the Clinton Climate Initiative “to create and advance solutions to root causes of climate change”; and the Clinton Presidential Center.

ABC reports, however, that it has been unable to get Hillary Clinton to provide documentation attesting to the donation of her speaking fees to the foundation. A review of the Clinton Foundation’s Form 990s for several of the past years reveals no disclosure of the names of major donors and therefore no information as to whether Hillary Clinton (or Bill Clinton, for that matter) has been donating speaking fees to their philanthropy. However, Hillary Clinton’s commitment to donate the speaking fees may be a decision of somewhat recent vintage, to be revealed in future 990s. (The most recent Clinton Foundation 990 available to the public on GuideStar or the Foundation Center’s online directory is from tax year 2012.)

Because the foundation is a 501(c)(3) public charity, however, it is not required to reveal the names of its donors and the amount they are giving the Clinton Foundation. For Hillary Clinton to fulfill her pledge of transparency, the foundation would have to take a step that it is typically not required to do. In light of the political backdrop of the Clinton Foundation, this additional voluntary transparency is very important. Disclosure of donations to charities and foundations controlled by powerful political figures should be done as a matter of course, whether they are the Clintons’ speaking fees or the six- and seven-figure contributions of corporate and other donors who might have expectations of something in the future.

One issue may be the ultimate sources of the payments for the Clinton speaking fees, who might be anticipating a good word, a positive reaction, or a business-world endorsement from the most powerful political couple in the nation. But there is another issue: These donations to Hillary Clinton’s income that are then transferred to her family foundation are not simply private contributions. In many cases, and particularly the most recent, these mammoth speaking fees are not from individual (or corporate) charitable donors, but from universities. Hillary Clinton defended the dynamic:

“I have been very excited to speak to many universities during the last year and a half, and all of the fees have been donated to the Clinton Foundation for it to continue its life-changing and lifesaving work,” Clinton told ABC. “So it goes from a Foundation at a university to another foundation.”

In other words, through her speeches, Hillary Clinton is in a way “repurposing” the donations others are making—or taxpayers are making—to these colleges and universities. The universities, like UNLV, take pains to suggest that, according to Michael Wixom, a member of the Nevada Board of Regents, “no student funds, no tuition funds, no state dollars are being used in any way to pay her fee,” but that only works in cases like UNLV’s where the venue is a fundraiser at which moneyed interests pay big sums, partially tax-deductible, for the honor of hearing Clinton’s speech. In other instances, the universities point to privately funded endowments or trusts that pay for Clinton and perhaps other speakers as well—or in many cases, they don’t even reveal how much they are paying or where the money for the speaking fees comes from.

Nonetheless, the optics aren’t good. Money is largely fungible. Students and their parents are hard-pressed by tuition increases—a four-year increase of 17 percent in the Nevada higher education system, a 6.5 percent increase announced this year for the University of Connecticut, the imposition of “student success fees” at many University of California system campuses as substitutes for formal tuition increases—making the Clintons’ speaking fees look problematic. Universities have squirmed under Congressional scrutiny but largely left unchanged such policies as amazingly high salaries for university presidents (41 of whom had compensation packages of more than $1 million as of 2011) and very low spending rates despite huge growth in their endowments in many cases, an issue constantly raised by Senator Charles Grassley of Iowa, pressing universities, much like foundations, to spend more from their endowments.

The Bill, Hillary & Chelsea Clinton Foundation may be doing extraordinarily wonderful things for communities around the world, but additional transparency is needed, especially now that Hillary Clinton is just about guaranteed the Democratic nod for the presidency; her speaking fees from nonprofit and public universities raise questions about what the universities (or some of their well-healed donors) might want from the Clintons.

In the case of Bill and Hillary Clinton, their intersection with nonprofits and foundations is hardly superficial. In her pre-candidacy days, Hillary Clinton co-founded the Arkansas Advocates for Children and Families. She was the first woman chairperson of the board of the national Legal Services Corporation and also chaired the Children’s Defense Fund, founded and run by civil rights activist Marion Wright Edelman. In philanthropy, she was a board member and one-time chair of the New World Foundation, a prominent funder of politically progressive of left-wing causes, and served on the board of the Wal-Mart corporation, whose corporate practices and philanthropic giving, generally the largest year upon year among all corporations, have been subjected to sometimes sharp criticism from political liberals.

In 1999, as First Lady, Hillary Clinton co-hosted the first-ever White House conference on philanthropy, with an accompanying report that called on foundations to do more for poor people and on wealthy people to give more, particularly in comparison to the charitable generosity of American’s poor and working classes. It was notable—and not just a bit humorous—when President Clinton called for the wealthy classes, as a result of a huge run-up in the stock market, to increase their charitable giving by at least one percent of their income:

“As we’ve had this phenomenal increase in wealth in our country, I would feel even better if the percentage of our national income devoted to charitable giving had gone up just a little bit. You heard Hillary say what we could do if we could just increase it by 1 percent,” the President said at the program. “But going from 2 to 3 percent is a huge increase. We've been sort of stuck at 2 percent. Now, when the stock market triples, 2 percent is a lot more than it used to be. That's not real pocket change; it’s real money.”

We doubt that the irony of the president calling for a one-percent increase in charitable giving with the backdrop of progressive foundations—like New World—campaigning in conjunction with the National Network of Grantmakers was due to a simple slip of the tongue on his part. He might have seemed to be simply riffing, but having watched him before and after, we would suggest that he knew exactly what he was doing. Ten years later, when Clinton spoke at a Council of Foundations-sponsored program on rural philanthropy and called out “foundation activity in rural America has been woefully inadequate,” he knew exactly what he was saying then as well. In both instances, the uncomfortable reactions of foundation CEOs in the room were fun to watch, even if private foundations haven’t budged on their defense of a five percent foundation payout (including related administrative expenses) or appreciably increased their grantmaking to rural America.

Now in charge of a very large foundation that is able to convene rich people from around the world and tally up their commitments to Clinton Foundation initiatives, both for international aid and for their domestic and presidential library program priorities, Bill and Hillary Clinton know their way around nonprofits and foundations to a degree probably unlike any other White House occupants. Probably only the Obamas, given President Obama’s past service on the board of the Woods Fund of Chicago and First Lady Michelle Obama’s numerous nonprofit connections, from the Chicago office of Public Allies to her work as a vice president for the University of Chicago hospital, compare in their personal nonprofit and philanthropic engagements prior to Barack Obama’s election as president.

Bill and Hillary Clinton know nonprofits and foundations better than almost any politician you will encounter. Their political advisors are dealing with the controversial political optics of the massive speaking fees by emphasizing the deposit of the fees to the Clinton’s family foundation as opposed to the Clintons’ own pockets. But the concern about the Clintons’ speaking fees isn’t one of political image. It is more than, as some in the press have intimated, a concern that the Clintons have become well ensconced in the top one percent of the nation’s socio-economic elite, aided and abetted by income from speaking fees.

The issue is that the philanthropic beneficiary of the speeches is a foundation, structured as a public foundation but clearly synonymous with and controlled by the Clinton family. Bill Clinton is arguably the most powerful and influential political figure in the nation, in or out of office. Unless her campaign tanks as it did in 2008, Hillary Clinton has an awfully good shot of becoming President of the United States. Donors and institutions that are paying them and their daughter huge sums for their speeches may very well be buying recognition and face time with powerful political leaders who they hope will be able to deliver political favors in the future.

It is troubling when corporate donors give to political charities with a more or less obvious expectation that softer and gentler treatment will ensue in the future. It is also troubling when some of the payers are public or nonprofit entities themselves such as colleges and universities, converting taxpayer funds and tax-exempt donations into signals that could end up in positive treatment when these institutions are themselves seeking access and favors, even if it is only a good word put in by one of the Clintons to a federal agency providing funding or to a regulator who might be taking a critical look at university tuitions and endowment payouts. It would be terribly disappointing to imagine that the colleges and universities paying the Clintons these sums might be fronting, hopefully unknowingly, for individual donors supporting these colleges’ lecture series, but individually have personal or political agendas that would benefit from being associated with an institution of higher education that pays Bill or Hillary Clinton a couple of hundred thousand for a speech—even if the money ends up in the Clintons’ family foundation.

In her 2008 Democratic primary campaign against Barack Obama, Hillary Clinton was resistant to calls to release the names of donors to the Clinton Foundation. Obama got a leg up against her as the “transparency candidate,” even go so far as to reveal, unlike Clinton, his senatorial earmarks, including two that went to Public Allies and one that was a request for $1 million for the University of Chicago hospital. In the presidential arena, transparency and disclosure always helps. In 2014—and as the presidential campaign for 2016 looms—Hillary Clinton should be doing the same and, given some of the legitimate criticisms, thinking seriously about the practice of taking large speaking fees from colleges and universities and repurposing them for her family foundation.