WASHINGTON, October 14, 2016 — An internal audit of the Clinton Foundation in 2011 revealed that the foundation purposely misled the IRS, when it claimed that it was enforcing a policy against conflicts of interest. The audit was requested by Chelsea Clinton, which was revealed by WikiLeaks. The blistering review — made public Thursday by WikiLeaks — described a tax-exempt public foundation with none of the independent oversight required under federal charity law.
Leading the review was Victoria Bjorklund, one of the nation’s top-ranked legal experts on good-governance practices for foundations and charities. She came out of retirement to lead the review. Thacher found cracks in the Clinton Foundation’s management structure, including a board consisting entirely of insiders loyal solely to Bill and Hillary Clinton.
The 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.
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.
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.
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 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.