Thursday, April 23, 2015

Do liberals support Hillary because they think the same way?

Hillary, Chelsea and Bill Clinton
Hillary, Chelsea and Bill Clinton
NEW YORK – The Bill, Hillary, and Chelsea Clinton Foundation – already under scrutiny for foreign donations – is now being accused of fraudulent and possibly criminal mismanagement.
Over the past six weeks, Wall Street financial analyst and investor Charles Ortel has shared with WND, prior to publication, the results of his six-month, in-depth investigation into what he characterizes as an elaborate scheme devised by the Clintons to enrich themselves.
Through their foundation, Ortel contends, the Clintons have defrauded an unsuspecting international public of hundreds of millions of dollars for personal gain.
In Ortel’s April 20 report, “False Philanthropy? First Interim Report Concerning The Bill Hillary & Chelsea Clinton Foundation,” he asks: “Did management exercise vigilance to ensure that the Clinton Foundation actually carried out its original and its amended tax-exempt purposes?”
Ortel asks further: “Did directors take reasonable care, as fiduciaries, under applicable state, federal and foreign laws to operate this charity serving, at all times, a public interest?”
If not, the executive management as well the board of directors of the Bill, Hillary, and Chelsea Foundation, as well as each of the Clintons personally, may face serious legal liabilities that could extend beyond civil mismanagement.
This article examines the first six “Specific Concerns” that Ortel has detailed.
Ortel says he found evidence the executive leadership of the Clinton Foundation mismanaged, perhaps intentionally, the financial and regulatory reporting required by both state government and federal authorities for charities under tax-exempt status as 501(c)3 foundations.
The next WND article in the series will focus on Ortel’s remaining concerns, including what appears to be a complex fraud the Clintons perpetrated that exploits HIV/AIDs victims in developed countries. The scheme, he said, drew funds from government-collected airline ticket liens imposed through the auspices of the United Nations World Health Organization.
Robin Hood in reverse?
Ortel began his April 20 interim report by posing a series of questions concerning the public disclosures of the Bill, Hillary, and Chelsea Foundation.
Ortel explained to WND that one of the reasons his analysis has taken months is that he found it painstakingly difficult to analyze publicly available financial information pertaining to the Clinton Foundation, because, as far as he could determine, reporting by the foundation since virtually its beginning is not technically complete in numerous material respects.
“The numbers that the Clinton Foundation supply to the global public in its legally mandated filings do not add up, are frequently incorrect and overall appear to be materially misleading,” Ortel explained.
He said that in numerous cases, the Clinton Foundation “appears to have followed inconsistent policies adding in appropriate portions of the various activities it pursued around the world to create ‘consolidated’ financial statements.”
“In some instances, portions were added only for some of the years in which the entities remained in operation, artificially enhancing purported financial results,” Ortel concluded. “In other cases, important elements of activity were improperly characterized and combined.”
Ortel asks: “Do the Clintons, and others who operate the Clinton Foundation, function as Robin Hood in reverse – do they dupe small, modest income donors to enrich themselves and cronies?”
Ortel believes he has found a systematic pattern of faulty financial management and reporting that is consistent with an effort to perpetrate what he suspects may be a massive criminal fraud.
Ortel’s principal charge is that the Clintons and those running the Clinton Foundation have devised an elaborate scheme to steal from hundreds of thousands of small contributors worldwide, as well as from larger donors, including foreign donors.
He further alleges the Clintons have covered up the alleged fraud by a series of apparently technical violations of federal and state law governing the operation of tax-exempt foundations. Ortel says that even if a sophisticated financial analyst were able to discern the fraud, an explanation of how it was carried out would be beyond the comprehension of the average reader.
Ortel’s ‘Specific Concerns
Ortel poses 10 specific concerns about the most recent set of Clinton foundation filings for the calendar year ending Dec. 31, 2013. He focuses on “insufficient and materially noncompliant detail” in the operation of the Bill, Hillary, and Chelsea Foundation in total, as well as in the operations of its largest single program, the Clinton Health Initiative Inc., typically represented in the Clinton financial reports by the acronym CHAI.
The first two concerns are explained in full detail, to demonstrate the technical depth of Ortel’s analysis. Ortel’s concerns three through 10 are presented in summary fashion. More in-depth analysis can be found at Ortel’s website.
Specific Concern No. 1: Financial disclosures for the Clinton Foundation Annual Report Year 2013 were filed significantly past regulatory deadlines that are regularly met by charities of comparable size and standing.
Tax-exempt organizations such as the Clinton Foundation and CHAI are required to file complete returns on IRS Form 990, together with all supporting schedules and attachments as soon as May 15 for the previous calendar year.
A single three-month extension is “automatically” granted; however, the IRS exercises more judgment granting or denying an additional extension past Aug. 15 for calendar-year filers.
The Clinton Foundation appears to have filed its Form 990 for 2013 around Nov. 14, 2014, some six months past the deadline, as noted on page 26 of the Bill, Hillary, and Chelsea Foundation consolidated financial statements for Dec. 31, 2012 and 2013.
Ortel explained the problem as follows: “During 2014, a year when the Clinton Foundation pursued an aggressive, far-reaching fundraising campaign, potential donors who might have been interested to review legally mandated filings that generally are an essential component of evaluating a charity did not have an extended period of time to do so.”
Specific Concern No. 2: The independent “audit” for the Clinton Foundation was completed 31 days after the date when Form 990 was filed with the IRS.
Tax-exempt organizations as large as the Clinton Foundation was in 2013 are required to obtain and contemporaneously file an independent audit that is performed by an informed, empowered and experienced firm of accounting professionals. Moreover, multiple questions asked in Form 990 require filers to reconcile entries with key numbers contained in the independent audit.
For calendar year 2013, the Price Waterhouse Cooper audit letter is dated Dec. 16, 2014, and signed at the Little Rock office, as seen on pages 3 through 25 of the consolidated financial statements for Dec. 31, 2012 and 2013.
Ortel further points out it is not clear that Price Waterhouse Cooper conducted an audit in the commonly understood sense of this term.
As the audit letter notes: “The consolidated financial statements of the Foundation as of December 31, 2012 and for the year then ended were audited by other auditors whose report, dated September 10, 2013, expressed an unmodified opinion on those statements.”
By this language, Price Waterhouse Cooper limits its evaluation as follows: “[T]he consolidated financial statements … present fairly, in all material respects, the financial position of the Bill, Hillary & Chelsea Clinton Foundation at December 31, 2013, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America”.
Ortel’s point is that since Price Waterhouse Cooper did not independently test the opening balance sheet for calendar year 2013, the accounting firm “cannot have truly assessed key financial positions and arrangements, let alone fully understood the long and deeply troubling history of CHAI dating to its formation in Arkansas in September 2009 and of a similarly named predecessor entity.”
Furthermore, Ortel points out, according to specific disclosures in the audit prepared by Price Waterhouse Cooper, “subsequent events” that may have occurred in 2014 were only evaluated through Dec. 5, 2014 (see the end of Footnote 1), leaving a potentially crucial 11-day period that was explicitly not considered by the accounting firm.
Finally, key sections of IRS Form 990 (See Schedule D, page 4, Parts XI and XII, as seen in page 51 at the above link to the consolidated statements for 2012 and 2013) are not filled in; so, unless an amended Form 990 was later filed, the foundation neglected to reconcile its independent audit with information contained in its 2013 Form 990 and failed to correct the material deficiency thereafter.
Ortel’s “specific concerns” numbered 3-5 are listed in summary form as follows:
Specific Concern No. 3: For 2013, Key “consolidating” information for constituent Clinton Foundation entities was prepared by management and reviewed by independent auditors; however, the information appears deliberately withheld from public view.
Specific Concern No. 4: In relevant years, the Clinton Foundation either filed and obscured consolidating financial information or elected to cease filing consolidating financial information.
Specific Concern No. 5: The financial impact of fundraising for the speakers’ endowment is not clearly delineated and segregated from results shown for operations.
Specific Concerns No. 6 and No. 7, dealing with the World Trade Organization and UNITAID, are the focus of the next WND article in the series.
What happened to Eric Braverman? 
Specific Concern No. 8: In light of the irregularities noted in Specific Concerns 1-7, the agreement to extend former Clinton Foundation CEO Eric Braverman’s employment contract in December 2014, combined with his subsequent and sudden departure just days later, early in January 2015, arouses deep suspicion, Ortel says.
On March 1, investigative reporter Kenneth P. Vogel writing in Politico, noted that in December 2014, the board of the Bill, Hillary, and Chelsea Clinton Foundation had approved a salary of more than $395,000, plus bonuses, to hire the Yale-educated Braverman while voting to extend his board term through 2017.
Vogel noted that Braverman, who had worked with Chelsea Clinton at McKinsey & Company consultancy, had been recruited “with the former first daughter’s support to help impose McKinsey-like management rigor to a foundation that had grown to a $2 billion charitable powerhouse.”
Braverman’s sudden departure shook the New York financial world.
Vogel wrote that in January, “only weeks after the board’s show of support and just a year and a half after Braverman arrived, he abruptly resigned, and sources tell Politico his exit stemmed partly from a power struggle inside the foundation between and among the coterie of Clinton loyalists who have surrounded the former president for decades and who helped start and run the foundation.”
“Some, including the president’s old Arkansas lawyer Bruce Lindsey, who preceded Braverman as CEO, raised concerns directly to Bill Clinton about the reforms implemented by Braverman, according to sources, and felt themselves marginalized by the growing influence of Chelsea Clinton and the new CEO she had helped recruit.”
They wrote: “For all of its successes, the Clinton Foundation had become a sprawling concern, supervised by a rotating board of old Clinton hands, vulnerable to distraction and threatened by conflicts of interest. It ran multimillion-dollar deficits for several years, despite vast amounts of money flowing in.”
In his report, Ortel comments on the Confessore-Chozick piece: “Considering this article now, with the benefit of hindsight and having poured through reams of public filings and comments made by the Clinton Foundation as well as related parties, one wonders how seriously management, directors, and other employees take their manifold legal duties, particularly when it comes to making truthful and complete, rather than untruthful, incomplete, and thereby misleading public disclosures.”
Ortel, a frequent guest on Bloomberg television and a contributor to several different print and Internet publications, including the Washington Times, began his Wall Street career from June 1980 through July 2002 with Dillon, Read, & Co., followed by the Bridgeford Group and the Chart Group.
His international investment expertise frequently has him engaged in complex legal and financial structures in many different countries. He is currently managing director of Newport Value Partners LLC, which provides independent investment research to professional investors. He is a graduate of the Horace Mann School, Yale College and the Harvard Business School.
In an article published Aug. 4, 2009, demonstrating the financial analysis for which Ortel is perhaps best known on Wall Street, Forbes magazine noted he first broadcast his concerns about General Electric’s earnings quality in 2008, when the stock was trading above $30 a share. A year later, GE’s market value had plunge by about $200 billion, to $13 a share.

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