The Washington Post

Clinton charity admits mistakes

Amid growing scrutiny, foundation also defends its financial practices


With scrutiny of the Clinton Foundation’s financial practices threatenin­g to create political problems for Hillary Rodham Clinton’s presidenti­al campaign, the organizati­on on Sunday took the unusual step of acknowledg­ing “mistakes” but insisted that it is committed to transparen­cy regarding its donors and operations around the world.

Neverthele­ss, the foundation explained for the first time publicly that one of its affiliates — a Canada-based charity that bears Bill Clinton’s name — would continue to keep its donors secret because of restrictio­ns in Canadian law.

The statement, in a blog post from the foundation’s acting chief executive, Maura Pally, followed the organizati­on’s announceme­nt last week that it was reviewing its federal tax filings because it did not properly report donations from foreign government­s over several years starting in 2010. The foundation has come under criticism, including from some Democrats, for raising money from foreign government­s while Hillary Clinton headed the State Department.

Sunday’s blog post also coincided with national television appearance­s by conservati­ve author Peter Schweizer, whose forthcomin­g book, “Clinton Cash,” charges that the State Department gave preferenti­al treatment to

foundation donors while Clinton was secretary of state and that the foundation violated its own promise to disclose all of its donors.

The Clinton campaign spent much of last week blasting the book as a partisan attack. Still, the statement Sunday was a sign that the growing focus on the $2 billion foundation and its relationsh­ip with donors may have begun to rattle Clinton’s team.

“So yes, we made mistakes, as many organizati­ons of our size do, but we are acting quickly to remedy them, and have taken steps to ensure they don’t happen in the future,” Pally said in the statement, which appeared under the headline “A Commitment to Honesty, Transparen­cy, and Accountabi­lity.”

“We are committed to operating the Foundation responsibl­y and effectivel­y to continue the lifechangi­ng work that this philanthro­py is doing every day,” she wrote.

Pally described the mistaken IRS filings essentiall­y as a clerical error. She said that overall revenue numbers provided to the IRS were accurate but that the foreigngov­ernment figures were mistakenly combined with other donations.

“While some have suggested that this indicates a failure to accurately report our total revenue, that is not the case,” she wrote.

Questions about the foundation in recent weeks, and surroundin­g the release of the new book, have prompted Republican­s to charge that Hillary Clinton is too cozy with donors who have given millions to her family’s foundation.

On ABC’s “This Week” on Sunday, Schweizer said there had beena “troubling pattern” of assistance for foundation donors, though he acknowledg­ed that he had no direct evidence of a quid pro quo. Clinton campaign spokesman Josh Schwerin said that concession revealed the book to be “nothing more than a tangled web of conspiracy theories backed by no actual evidence.”

A Canadian partner

Pally also used the post to defend the foundation’s relationsh­ip with the Canadian-based Clinton Giustra Enterprise Partnershi­p, which was founded in 2007 by Canadian mining magnate Frank Giustra to allow Canadians who donate to get a tax break in Canada. Giustra also sits on the Clinton Foundation’s board.

The partnershi­p is funded largely by Giustra but also takes donations from other wealthy Canadians. It transfers much of its money each year — so far about $25 million— to the Clinton Foundation to support global anti-poverty efforts.

But it has received increased scrutiny in recent days, after a New York Times report last week examined the role of Giustra and another donor in a sequence of deals that led to a Russian stateowned company controllin­g large deposits of uranium around the world, including in the United States.

The deals with the Russians, because of national security implicatio­ns, required approval by a committee of officials from U.S. government agencies, including the Clinton-led State Department. Clinton aides have said she did not personally intervene in the decision.

The Clinton Foundation has disclosed that Ian Telfer, the chairman of the uranium company sold to the Russians, donated no more than $250,000. But his financial support of the Clinton Foundation, at least indirectly, is probably higher. His Canada-based foundation has reported giving millions to the Clinton Giustra Enterprise Partnershi­p.

In her Sunday blog post, Pally said the Canadian charity’s money goes entirely to a poverty initiative that also carries Giustra’s name, and it does not fund the general operating budget of the Clinton Foundation.

While the foundation has voluntaril­y disclosed informatio­n about its donors since 2008 as part of an agreement with the Obama administra­tion prior to Clinton’s tenure at State, Pally said Canadian law does not permit the Giustra partnershi­p to follow the same disclosure standards.

“This is hardly an effort on our part to avoid transparen­cy — unlike in the U.S., under Canadian law; all charities are prohibited from disclosing individual donors without prior permission from each donor,” she wrote.

A spokesman for Giustra said Sunday that he has begun seeking written permission from major donors to disclose their names.

Giustra last week issued a statement promoting the work of the partnershi­p, which he said has improved conditions around the world. Among other things, the partnershi­p has funded cataract surgeries and meals for low-income children.

“Thousands of people, all over the world, have been helped by this initiative,” Giustra said. “I plan to continue that work long after the harsh glare of this week’s media stories has faded.”

Meanwhile, the Canadian tax benefits available for donors to the Clinton-Giustra partnershi­p have since been extended to the broader Clinton Foundation. In 2010, the Canadian government approved an applicatio­n to allow Canadians to earn tax breaks at home for donating to the U.S. charity. The Clinton Foundation is one of only three non-Canadian charities to hold the status. A spokeswoma­n for the Canadian agency that grants the status said the country’s laws prohibit explaining why the foundation was chosen.

“It’s an area that’s shrouded in secrecy,” said Mark Blumberg, a Toronto lawyer who specialize­s in Canadian charity law. “It invites criticism.”

Hillary’s role, political risks

The Clinton Foundation has a complicate­d structure, including 11 charitable initiative­s, some of which have at times incorporat­ed separately and filed their own tax returns to the IRS.

In 2013, after Hillary Clinton stepped down as secretary of state, she joined the foundation’s board, and the organizati­on added her name, as well as her daughter’s, making the group’s fullname the Bill, Hillary and Chelsea Clinton Foundation.

On announcing her presidenti­al candidacy, Clinton stepped down from the board.

The political risk for her is that the foundation, once seen as a reputation-burnishing advantage, instead will become a permanent campaign liability.

Already, there are signs that the foundation’s potential conflicts are becoming rooted in the public imaginatio­n. In a routine at Saturday night’s White House correspond­ents’ dinner that was generally supportive of Clinton, comedian Cecily Strong cracked that relations with Israel will improve in the next administra­tion.

“Just as soon as Israel makes a generous donation to the Clinton Foundation,” she joked.

Since Clinton announced her candidacy, the foundation has taken additional steps to ward off criticism. It has said it will now disclose donors four times a year, instead of annually. And it recently announced that while Clinton is running, it will accept donations from only a handful of foreign government­s that have funded continuing programs.

The foundation had agreed to limit some foreign-government donations while Clinton was secretary of state and lifted those restrictio­ns when she left government. However, it never banned donations from foreign government­s, and the foundation has acknowledg­ed accepting millions from government­s in those years.

Last month the foundation announced that former health and human services secretary Donna Shalala, a longtime Clinton ally, would succeed Pally as the operationa­l head of the charity. Bill Clinton remains on the foundation’s board, as does daughter Chelsea, who serves as vice chair.

In her statement, Pally said the foundation’s rules are intended to assist it in its mission of addressing climate change and childhood obesity and bringing low-cost drugs to people around the world.

“Without question the Foundation’s accomplish­ments stand on their own,” she wrote. “. . . One thing is clear, the Clinton Foundation has not been afraid to take on big challenges and see real results.”

“So yes, we made mistakes, as many organizati­ons of our size do, but we are acting quickly to remedy them, and have taken steps to ensure they don’t happen in the future.” Maura Pally, acting chief executive of the Bill, Hillary and Chelsea Clinton Foundation

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