NYT, Globe: Clinton Foundation used Byzantine organization to hide donors
posted at 8:41 am on April 30, 2015 by Ed Morrissey
When the sleazy connections surrounding the Uranium One/Rosatom deal and the Clintons first emerged, the Clinton Foundation chose a very odd hill to defend — the privacy of the donors of the Clinton Giustra Enterprise Partnership. Frank Giustra had been one of the principals in the deals that eventually gave the Russians control of half the uranium market, including here in the US, and the 1,100 undisclosed donors to the Clinton Foundation subsidiary appeared at first to be more of a sideshow to the Uranium One scandal.
Maybe not. The New York Times’ Mike McIntire and Jo Becker report that even the tax break aspect of the CGEP got overstated, and that it had been unnecessary for Canadians wishing to take the tax writeoff since 2010. So why did 1100 donors bother with it — and why did the Clinton Foundation carefully choose the province in which to incorporate it?
Instead, the foundation said that the partnership was created by the Canadian mining financier Frank Giustra to allow Canadian donors to get a tax benefit for supporting his work with Mr. Clinton — a benefit that came with the price of respecting Canada’s privacy laws. On Wednesday, the partnership issued a statement citing a legal opinion that “charitable donors have an expectation and right of privacy.”
However, interviews with tax lawyers and officials in Canada cast doubt on assertions that the partnership was necessary to confer a tax benefit; an examination shows that for many donors it was not needed, and in any event, since 2010, Canadians could have donated to the foundation directly and received the same tax break. …
For example, the Uranium One chairman, Ian Telfer, used his family charity, the Fernwood Foundation, to make his donations to the partnership. Mr. Telfer would have received a tax benefit when he first put his money into Fernwood, not when Fernwood donated to the partnership.
“There would only be one tax benefit no matter how many charities it passes through,” said Mark Blumberg, a tax lawyer in Toronto.
The partnership might have been necessary to provide a tax benefit to early individual donors, but not since 2010. That year, the Clinton Foundation was specially designated by the Canadian government, allowing Canadians to write off donations given directly to it.
In other words, there was no tax benefit for institutional donors at all, and none for individual donors after 2009. The benefit was purely secrecy, and that benefit redounded mostly to the Clintons.
After getting four Pinocchios from the Washington Post, the foundation complained that Michelle Ye Hee Lee hadn’t taken into consideration the laws of British Columbia, which are tougher on donor privacy. Even those, McIntire and Becker report, wouldn’t bar a charity from revealing its donors, though they may need to ask permission in some cases. The Clintons specifically pledged to provide that transparency as a key part of her appointment to the State Department, in order to prevent what happened with Uranium One and other pay-for-play issues with foreign entities while she served as Secretary of State.
That still prompts the question: why incorporate CGEP in British Columbia? Why not in Toronto, Ontario, which is just a stone’s throw from New York, where both the Clintons and their foundation are based? That choice certainly provides them a shield, at least a rhetorical one, to defend the lack of transparency that Hillary once pledged to provide. Was that deliberate? Given their rapid reliance on this Byzantine structure as their defense, it’s difficult to conclude otherwise.
Nor is that the only example of obfuscation. The Boston Globe’s Annie Linskey reports today that one of the foundation’s highest-profile units, the Clinton Health Access Initiative based in Boston, hid “tens of millions” of dollars in foreign government donations. Despite an agreement to disclose those donations, the Clinton Foundation never did:
The Clinton Health Access Initiative never submitted information on any foreign donations to State Department lawyers for review during Clinton’s tenure from 2009 to 2013, Maura Daley, the organization’s spokeswoman, acknowledged to the Globe this week. She said the charity deemed it unnecessary, except in one case that she described as an “oversight.”
During that time, grants from foreign governments increased by tens of millions of dollars to the Boston-based organization.
Daley’s acknowledgement was the first by the charity of the broad scope of its apparent failures to fulfill the spirit of a crucial political pledge made by the Clinton family and their charities. The health initiative has previously acknowledged failing only to disclose the identity of its contributors, another requirement under the agreement.
The failures make the Clinton Health Access Initiative, which is headquartered on Dorchester Avenue in South Boston, and goes by the acronym CHAI, a prominent symbol of the broken political promise and subsequent lack of accountability underlying the charity-related controversies that are dogging Clinton as she embarks on her campaign for president.
They also underscore the deliberate nature of the Clinton’s secrecy. It’s been “shields up” since 2009, and the Clintons took in millions upon millions of dollars by trading in on their access to power. Just imagine what they’ll do in the White House.
Update: I had a bad link to the Globe report in the original post. It’s fixed now.