Did Clinton Foundation mi

filings raise the question

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12/11/2018

By John Solomon More Videos

Opinion Contributor

When confronted by detractors, the Clinton Foundation often uses a common line of
defense: The charity is one of the most scrutinized in history and no one has found anyt
wrong with it.

But state regulatory filings suggest that may not be true.

In December 2005, for example, the Utah Division of Consumer Protection flagged miss
information in the Clinton Foundation’s federal tax filing with the IRS, known as a form 9
The state regulator specifically flagged money spent on professional fundraisers and
consultants that were excluded from the required section of the filing.

The state regulator urged the charity to file “an amended IRS form 990 reporting
professional fundraising/consultant fees on line 30.” In particular, o"icials questioned n
a half-million dollars in consultant fees about which it wanted more detail.

The foundation's tax filing for the year in question, 2004, showed zero dollars spent on t
required line for fundraising consulting expenses, even though other documents filed w
the IRS identified more than $400,000.

The review was standard for a charity seeking a license to operate in Utah. The response
regulators got back, however, was not so standard: Former President Clinton’s charity
declined to make the change, even though Utah was suggesting the foundation's federa
form was incomplete or misleading.

“The problem that the Foundation faces is the enormous expenses and undertaking it w
be to amend its 990,” a law firm representing the Clinton Foundation wrote back.

“Given that obstacle, the Foundation has no choice but to withdraw its application to re
to solicit the public in Utah.”

In lay words, the cost of properly informing the IRS and complying with federal tax law w
too much, so the foundation just ditched its Utah licensing request. There is no record o
amended 2004 tax form by the charity, which means Utah’s concerns about possible m
information for the IRS wasn't addressed at the federal level.

Foundation o"icials confirm the episode but said they believed they did not mislead the
because other parts of their submission included fundraising consulting expenses in a
category called "Other Expenses." "Our 2004 Form 990 is complete by IRS standards as
fully disclose fundraising expenditures in Part II – Other Expenses," the foundation said
statement emailed to me.

The Utah episode, though a decade old, and other state regulatory issues involving the
Clinton Foundation are gaining new attraction because they are included in thousands o
pages of documents gathered in a whistleblower submission filed last year by a firm
composed of former federal law enforcement investigators, called MDA Analytics LLC

That submission made with the IRS, and eventually provided to the Justice Department
Washington and to the FBI in Little Rock, Ark., alleges there is “probable cause” to believ
Clinton Foundation broke federal tax law and possibly owes millions of dollars in tax
penalties. That submission and its supporting evidence will be one focus of a GOP-led
congressional hearing Thursday in the House.
The foundation strongly denies any wrongdoing. But it acknowledges its own internal le
reviews in 2008 and 2011 cited employee concerns ranging from quid pro quo promises
donors, to improper commingling of personal and charity business.

Another of the issues the foundation’s own lawyers flagged: a culture of noncompliance

Some issues with compliance are clear in a review of more than 2,000 pages of state
regulatory filings and actions involving the foundation that were included in the
whistleblower submission.

For example, the foundation entered into a consent decree in 2002 in Mississippi in whi
admitted it had raised money in the state without a proper license. The foundation says
was simply an oversight, paying a small fine in the hundreds of dollars.

But the charity potentially engaged in false statements for years later, inaccurately decl
in numerous states that it had never been subject to an adverse regulatory action — wh
failing to disclose the Mississippi violation.

The whistleblower submission to the IRS identified more than 100 state forms in which t
foundation inaccurately answered. The foundation conceded the errors to me but sugg
they were akin to minor tra"ic violations, pointing to a column by a tax expert two years
that made such a case.

Likewise, in 2008, the Clinton Foundation’s AIDs charitable arm had its license to collec
donations in Massachusetts involuntarily revoked for failure to file the necessary paperw

Foundation o"icials blamed that action on paperwork failing to keep up with changes in
group, which altered its name and eventually spun off from the foundation. State regula
weren’t told the old group’s name had been allowed to expire.

The records also show the foundation received multiple deficiency notifications, and ha
license expire once in the state of Georgia, usually because of late paperwork.

At Thursday’s congressional hearing, such evidence likely will be cited by Republicans e

to raise the question of whether the Clinton Foundation got favorable treatment from th
and FBI and was allowed to skate despite warning signs or technical violations. With a
current investigation of President Trump’s family charity already public, expect the GOP
question whether there are two forms of justice: one for the Clintons, and another for th
Trumps.

John Solomon is an award-winning investigative journalist whose work over the years has
exposed U.S. and FBI intelligence failures before the Sept. 11 attacks, federal scientists’
misuse of foster children and veterans in drug experiments, and numerous cases of polit
 corruption. He is The Hill’s executive vice president for video.

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