Friday, October 14, 2016

Clinton Foundation A Slush Fund For Political Favors from Hillary

A review of the Foundation by Simpson Thacher found numerous weaknesses in the Clinton Foundation’s management structure, including a board consisting entirely of insiders loyal solely to Bill and Hillary Clinton, the board’s failure to oversee finances properly, inherent conflict of interests and the use of audits based on cash accounting rather than the federally mandated accrual basis. (RELATED: Clinton Foundation Ignored All ‘Best Practices’ For Good Governance)

But most serious disclosure in the review was that donors expected a “quid pro quo” in return for their contributions. “Some interviewees reported conflicts of those raising funds or donors, some of whom may have an expectation of quid pro quo benefits in return for gifts.” 

The reviewers did not identify the fundraisers or the donors. But many prominent foreign leaders gave millions to the foundation, ranging from Middle East sheiks, Eastern European tycoons, African mining magnets and American billionaires. (RELATED: EXCLUSIVE: House Letter Calls Clinton Foundation ‘Lawless’)

“This was bright line illegal,” Wall Street analyst and philanthropy expert Charles Ortel told The Daily Caller News Foundation. “This is a rogue charity that was out of control for years. And the trustees elected to not correct them. We’re not talking about people with no knowledge of the laws. These are people who can’t claim ignorance.”

The foundation was then led by director Terry McAuliffe, Bill’s most successful political fundraiser and former chairman of the Democratic National Committee who is now Virginia’s governor. McAuliffe gave the Clintons a $1.35 million gift that allowed them to buy their 11-room Chappaqua, New York, mansion in 1999.

Simpson Thacher found the board played no meaningful role in deciding either the Clinton Foundation’s strategic policies or in evaluating the effectiveness of the organization’s global programs for the poor.

“Failures by boards of directors in fulfilling their fiduciary responsibilities may arise when a board leaves governing responsibility to a small number of people, some of whom may have conflicts of interest that can mar their judgment,” the review said.

While foundations of comparable size meet on a quarterly basis, the review found that the Clinton Foundation board meetings were convened only once a year and appeared to be held mainly to satisfy state and federal charity laws.

“We believe that one meeting a year is inadequate for public charities of this size and complexity,” the review charged. “The foundation’s outside auditors noted as a material weakness the lack of board meetings and that board minutes are not signed. This weakness was not corrected even after being noted by the auditors. In addition, minutes appear to have been cloned from one year to the next.”

The reviewers also found that none of the board members had “strong financial know-how to participate in the annual audit process. We recommend that the board appoint an audit committee consisting of independent directors with strong financial know-how.”

The review said “conflicts are not timely disclosed” and “when staff becomes aware of conflicts, they are unsure how to raise and clear these conflicts. Finally, board members do not appear to be following the policy when they become aware of conflicts.”

“This appears to be a case study in charity fraud,” Ortel told TheDCNF. “And nonetheless, afterwards the record shows no changes were made, this charity even went around the world raising even more money.”

The law firm’s findings were delivered to Clinton Foundation chief Bruce Lindsey and to John Podesta, a close confidant of the Clintons. Podesta was White House chief of staff under Bill and is now Hillary’s national campaign chairman.

The unrelentingly critical review was likely shared with Hillary while she was secretary of state.

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