Guest post by Arnold Ziffel
The Clinton Foundation has an opening for a CFO. Is the Foundation at risk due to this new opening?
Attorney Doug Band, who served as President Clinton’s man Friday and acolyte for twenty years, divulged in a recent Vanity Fair article the inside self-dealing activities involving the Clinton Foundation. Doug Band is the architect, documented thanks to WikiLeaks, who designed the Foundation’s fundraising arm known as the Clinton Global Initiative, which comingled Clinton’s charitable and private interests.
Now the Clinton Foundation has begun an executive search for replacing another key Clinton insider, Andrew Kessel, who has served over 17 years as its Chief Financial Officer. He is considered the gatekeeper of the Foundation’s financial skullduggery. Will Mr. Kessel step forward like Doug Band?
Over the years, Mr. Kessel has sworn to the financial records’ integrity by signing under perjury the 990 tax returns and numerous state charity filings. He also signed management representation letters to the auditors regarding the financial statements’ accuracy, and there are no irregularities or related party transactions. However, Wikileaks release of the independent governance review conducted by the law firm Simpson Thacher & Bartlett, LLP, exposed substantial problems. Simpson Thacher found the Foundation kept misleading cash-basis books, lacked controls, faked Trustee minutes, filed false disclosures, and restated financial statements and amended tax returns.
The following are some major examples of rampant irregularities gleaned from public records that Mr. Kessel was involved in as Chief Financial Officer.
Failure to Restate the Foundation Financial Statements
Hillary Clinton’s 2016 Presidential run caused the Foundation to evaluate, amend, and refile its tax filings for 2010, 2011, 2012, and 2013 on November 16, 2015. The justification was to disclose foreign government grants and the Clintons’ paid speeches on behalf of the Foundation because a few lines on the returns were left blank.
Shortly after that, the Foundation deliberately removed the 2010 and 2011 Consolidating Statements of Financial Position and Activities published on the Clinton Foundation website. The Foundation redacted the pages from the audited financial statements to prevent the general public from comparing the Foundation, Clinton Global Initiative, and Clinton Health Access Initiative entities to the individual amended 990 tax returns. Unfortunately for the Foundation, the supplementary schedules are available on the New York charity site.
The New York documents reconciled to the amended 990 returns identified substantial material errors. Such as the Clinton Global Initiative and Clinton Health Access Initiative’s reckless spin-off into separate operating subsidiaries, missing foreign subsidiaries, and the hundreds of millions in accounting errors. Comparing the original tax returns to the amended returns also found hundreds of errors and omissions occurring for each year. Reissuing the audited financial statements was required, but the Foundation failed to restate them and the external auditors ignored it.
Massive Accounting Errors
The Foundation’s agreement with the World Health Organization’s Unitaid was to purchase reduced-priced medicines as an agent. The Foundation negotiated for reduced-priced drugs with Unitaid advancing funds to the Foundation to pay for the purchases shipped overseas by pharmaceutical companies. Generally accepted accounting principles required the funds to be held in an escrow account; however, the Foundation booked the Unitaid advances as charity revenue and payments as program expenses. The accounting error from 2006 through 2011 totaled a whopping $483 million overstatement of revenue and expense. The Foundation never disclosed the monumental blunder, which grossly overstated its charitable activities and possibly concealed the funds’ diversion.
$18.3 Million Underpayment to Congress’s National Archives
The reported historical construction cost of the Clinton Library is $171.3 million or $1,332 per gross square foot. The Library cost is scandalously high when compared to equivalent high-quality Little Rock commercial buildings. The Heifer International and Arkansas Study Institute construction cost per gross square foot is $198 and $238, respectively, a warning sign of possible construction fraud.
According to the National Archives and Records Administration transfer agreement, the Foundation conveyed 68,698 net square feet to NARA. The contract stipulated that the Foundation fund the NARA endowment using the cost transferred factor at 20% as required by the Presidential Libraries Act of 1986. NARA uses the funding to offset future maintenance and restoration costs for the Library. The Foundation retained the remaining net square footage for the convention hall, the for-profit cafe, and Bill Clinton’s illicit tax-free (aka inurement) living quarters.
Bill Clinton’s Private Penthouse and Garden on Library Rooftop
The Clinton Foundation transferred to NARA a disproportionate low asset cost of $36 million and funded the endowment for $7.2 million based on deceptive documentation and unsupported by an independent valuation. However, the required NARA transfer cost should have been $127.5 million with an endowment payment of $25.5 million. The Foundation by design made an $18.3 million underpayment.
Source: “Proposed Term Under Which NARA Would Use, Maintain, Operate, and Protect the William J. Library” Signed By James Rutherford, President of The William J. Clinton Presidential Foundation on April 20, 2004.
Confession is Good for the Soul
Doug Band disclosing his and Bill Clinton’s role in the Foundation’s pay-for-play cleared the public disclosure path for Andrew Kessel to follow.
Allegedly, Kessel admitted privately that he “knows where the bodies are buried.” You can try to bury the truth, but you can never hide it.
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