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Part Two - The Clinton Foundation's de-registered HIV/Aids Initiative - "This is not Charity"

To recap Part One

Until 2013 Bill Clinton was not a director, trustee, manager, delegated attorney or representative of the tax-exempt charitable organisation the Clinton Foundation (which changed its name from the William J Clinton Presidential Foundation and other variants over time).  

The approved scope of the Clinton Foundation in 2006 did not extend to fundraising for HIV/Aids.

The Clinton HIV/AIDS Initiative Inc was formed in 2004 and operated from Massachusetts.

 

In 2008 Clinton HIV/AIDS Initiative Inc was dissolved by regulators

The entity's license to operate was revoked by authorities in the Commonwealth of Massachusetts by an order published on 31 March 2008, taking operative effect from 31 December 2007.

Here is a copy of the extract:

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I wrote to the Massachusetts authorities last Monday:

From: Michael Smith <bexleyborn@gmail.com>
Date: Mon, Feb 29, 2016 at 11:44 AM
Subject: Request for copy of certificate of revocation
To: archives@sec.state.ma.us


Hello,

I am an Australian Journalist reporting on our government's contributions to certain charitable entities in the United States.

I am interested in the revocation of the certificate of incorporation issued to Clinton Foundation HIV/Aids Initiative Incorporated.

ENDS

Later that day an officer of the Commonwealth of Massachusetts (whose details have been forwarded by me to the Australian DFAT) replied, stating:

The entity was dissolved by our office for failure to file annual reports in consecutive years.

 

 

Australia's dealings with the Clinton Foundation HIV/Aids Initiative Inc

This DFAT FOI release discloses the following agreements with the Clinton HIV/Aids Initiative Inc

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The Austender.gov.au website discloses the following contractual agreements:

 

AusAID and Clinton Foundation HIV/AIDS

CN ID CN60579    
Agency Department of Foreign Affairs and Trade - Australian Aid Program
Publish Date 13-Feb-2008 
Category Healthcare Services
Contract Period 31-Jul-2006 to 30-Jul-2009 
Contract Value (AUD) $5,257,378.50 
Supplier Name CLINTON FOUNDATION HIV/AIDS INITIATIVE
 

Last Updated: 13-Feb-2008 5:53 pm (ACT Local time)Full Details

China Clinton Foundation - Xinjiang HIV/AIDS Treatment

CN ID CN60580    
Agency Department of Foreign Affairs and Trade - Australian Aid Program
Publish Date 13-Feb-2008 
Category Healthcare Services
Contract Period 31-Jul-2006 to 30-Sep-2009 
Contract Value (AUD) $1,840,322.00 
Supplier Name CLINTON FOUNDATION HIV/AIDS INITIATIVE
 

Last Updated: 13-Feb-2008 5:53 pm (ACT Local time)Full Details

AusAID and Clinton Foundation HIV/AIDS Initiative: Indonesia Program...

CN ID CN119937    
Agency Department of Foreign Affairs and Trade - Australian Aid Program
Publish Date 12-Sep-2008 
Category Disease prevention and control
Contract Period 1-Oct-2007 to 31-Oct-2010 
Contract Value (AUD) $4,323,000.00 
Supplier Name CLINTON FOUNDATION HIV/AIDS INITIATIVE
 

Last Updated: 12-Sep-2008 1:24 pm (ACT Local time)Full Details

The AusAID and Clinton Foundation HIV/AIDS Initiative: Papua New Guinea

CN ID CN310696    
Agency Department of Foreign Affairs and Trade - Australian Aid Program
Publish Date 15-Jul-2010 
Category Health administration services
Contract Period 14-Aug-2006 to 31-Dec-2010 
Contract Value (AUD) $15,127,586.10 
Supplier Name CLINTON FOUNDATION HIV/AIDS INITIATIVE
 

Last Updated: 15-Jul-2010 3:08 pm (ACT Local time)Full Details

This announcement shows SenatorBob McMullen signing an Agreement with the Clinton Foundation HIV Aids Initiative Inc in 2008, after its de-registration was effective.

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Media Release

20 February 2008

Australia & Clinton Foundation Team Up to Combat HIV in Indonesia 

Australian Ambassador to Indonesia, Bill Farmer, said he welcomed yesterday’s announcement that Australia would contribute A$3.9 million (Rp32 billion) through the Clinton Foundation to help combat HIV in Indonesia. 

Australia’s Parliamentary Secretary for International Development Assistance, Bob McMullan, yesterday signed a A$3.9 million agreement with Clinton Foundation HIV/AIDS Initiative Chair, Ira Magaziner, in Canberra. 

The new funding for Indonesia is part of a A$25 million Australian Government commitment to support the Foundation’s HIV/AIDS Initiative in the Asia Pacific region from 2006 to 2010. 

Work funded through this agreement is already underway in Vietnam, China and Papua New Guinea, where the Foundation is working with governments and other partners to increase the availability of high-quality AIDS care and treatment for people in need. 

“HIV is one of the greatest threats to economic and social development in the Asia Pacific region, including Indonesia,” Farmer said. “We are therefore committed to working with the Indonesian Government and partners like the Clinton Foundation to help combat HIV.” 

He said that under the MOU, Australia would work with the Clinton Foundation to improve access to life-saving drugs for people living with HIV and to increase the availability of diagnostic testing in Indonesia. 

This new funding is one component of the Australia-Indonesia Partnership for HIV. Over the next eight years, Australia will provide A$100 million to prevent and limit the spread of HIV in Indonesia, to improve the quality of life for people living with the virus, and to alleviate its socio-economic impact. 

 

This post-implementation report (which did not pick up on the deregistration) shows us dealing with the Clinton Foundation HIV/Aids Initiative Inc out until 2010.

http://dfat.gov.au/about-us/publications/Documents/hiv-chai-evaluation-report.pdf

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For the avoidance of doubt, here are definitions in the report's glossary

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The Clinton Foundation itself did not possess the regulatory approvals to raise funds for the purposes of working on HIV/Aids.

It makes a hollow claim that in 2005 it merged the Clinton Foundation HIV/Aids Initiative Inc into the Foundation itself.

It did no such thing.   The process for moving the assets/operation of a US 501(c)(3) tax exempt charitable entity are complex and extensive - those processes involving the Supreme Court are described here:

https://portal.hud.gov/hudportal/documents/huddoc?id=DOC_14713.pdf

Rather than fess up to its deregistration, Clinton and his offside Ira Magaziner continued on as if nothing had happened.

This extract from The Atlantic magazine shows how the two conmen operated their HIV/Aids business.

The title "This is Not Charity" says it all, this was a business - and note the date, just months before their incorporated entity was dissolved.

http://www.theatlantic.com/magazine/archive/2007/10/-this-is-not-charity/306197/

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The story he tells is that in July 2002, when the foundation had only 12 employees (it now has hundreds working on HIV/AIDS alone), he and Nelson Mandela went to an AIDS conference in Spain, where the prime minister of Saint Kitts and Nevis, a small Caribbean country, said to him, “You know, we don’t have a denial problem, we don’t have a stigma problem. We have a money and an organizational problem.” The foundation began its AIDS efforts that year in the Bahamas, and immediately discovered that the government there was paying $3,600 a year per person for generic drugs whose list price was about $500. It turned out that middlemen were taking steep markups, which the foundation eliminated by making a deal with the manufacturer. “It got me to thinking about how once more we had a public-goods market that was not only underfinanced; it was disorganized,” Clinton says. 

 

Clinton can and certainly does raise money, but he didn’t have enough to endow a major grant-making foundation. What he did have was an ex- presidential bully pulpit, a deep Rolodex, the power to attract attention and talent, and an inkling that those assets might be used to do for public goods something like what entrepreneurs and investment bankers do in the corporate world: midwife new markets or scale up underdeveloped ones. The idea is to identify markets that aren’t supplying enough socially beneficial goods or services to meet the potential demand, and then to lead them to a new equilibrium. “What we tried to do,” Clinton says, “was to get them to go from what I call a ‘jewelry-store model’ to a ‘grocery-store model’—from a high-profit, low-volume, uncertain-payment business to a low-margin, high-volume, certain- payment business.” 

None of that was clear in the summer of 2002, when Clinton made the decision that may do more than anything to shape his postpresidential legacy. To launch his HIV initiative, he turned not to a philanthropist or public-health doctor or development professional. “It was a system thing,” he says. “It’s the absence of effective systems that I believe is the primary factor holding a lot of these countries back. We wanted people who could operate efficiently in the nonprofit field in the same way they had in business.” So he called a business consultant named Ira Magaziner.  

"Ira,” as everyone calls him, is a man with a past. He has been Clinton’s friend since they were at Oxford together, on Rhodes scholarships, in the late 1960s. Magaziner has had a two-track career as business consultant and social reformer, with more success at the former than at the latter. As a boy, he led a strike at his summer camp, and as a student at Brown University, he led a major curriculum reform. In the early 1970s, he organized a group of recent college graduates to live in the wilting postindustrial town of Brockton, Massachusetts, and work for social change—an idiosyncratic effort he later called naive. No less naively, in 1984 he led a state-appointed study commission that cooked up a 1,000-page industrial policy for Rhode Island. The voters rejected it by 4-to-1. In 1993, he repeated the Rhode Island mistake, this time on a heroic scale. The Clintons tapped him to manage their health-care reform. Again he produced an ambitious, complicated plan, this time running to 1,342 pages; again it bombed politically. Magaziner’s gift is his ability to see entire systems whole, from their smallest details to their global architecture. That made him a successful business consultant, but it did him little good on Capitol Hill, where any plan with more than two or three moving parts is too complicated. Magaziner was a parallel processor, an efficiency expert whose plans depended on simultaneous changes on multiple fronts and levels. He was ill-suited to Washington, where progress is serial and incremental. 

Stung, he worked for a while on Internet issues for the Clinton administration and then went back to consulting, which was what he was doing when Clinton called in 2002. Having by then replenished his bank account, he kept one business client and otherwise donated himself to the Clinton Foundation. He takes no salary, saying he wants to instill a volunteer ethic. 

I first met Magaziner in 1992, when he was working on the incoming Clinton administration’s transition team. His laser-like intensity and his command of detail were unmistakable then, and no less so when I reconnected with him for this article, in February. Now 59, he retains a quiet, composed demeanor and a rapid-fire manner of speaking, but what was once an unruly shock of gray curls is now a straight corporate cut. He rarely laughs or raises his voice. The words that people use again and again in connection with him are brilliant and driven. He thrives on impossible deadlines, and his stamina for travel beggars belief: He all but lives in hotels and airplanes, proselytizing, making contacts, initiating negotiations, closing deals. Staff members say they get e-mails from him at midnight and 5 a.m. Asked if his pace is sustainable, he replies, “I still feel 18. I have a feeling if I stop it will all catch up.”

Where exactly Clinton’s role in the foundation ends and Magaziner’s begins is not altogether clear, perhaps not even to them. Sometimes, to an outsider, they seem to share a brain. Clinton, clearly more than a figurehead, is chairman, guiding spirit, and the big gun strategically deployed for publicity and persuasion. “Without him as anchor and persona,” Magaziner says, “we’d be pounding sand.” Magaziner is effectively chief executive, strategist, recruiter, and senior negotiator, operating with what appears to be freewheeling authority. “We’ve worked together long enough so he trusts me,” Magaziner says of Clinton. 

The sensibility Magaziner brought to the AIDS assignment was that of a business strategist who had helped big companies—General Electric, Black & Decker, Corning—cut costs by consolidating orders, automating communications, and working with suppliers to find efficiencies. With Clinton’s cachet and idealism as a lure, Magaziner set about hiring people in his own image. He wanted people who knew how to put together a business plan, who understood how companies work, and who could talk to line executives in their own language. 

Starting with a staff of five, the foundation began visiting drug manufacturers. “I saw that the drugs, even the generic versions, were very high-priced,” Magaziner says, “and I knew that the inherent cost structure couldn’t be that high. I surmised that what was happening is that there were only 70,000 people being treated in the developing world. I surmised the manufacturers weren’t able to get scale economies in production. I began to see that we could aggregate enough demand to form what businesses call a buyers’ club.” 

So the foundation went to governments in Africa and the Caribbean and organized demand for AIDS drugs, obtaining intentions to place large orders if prices could be cut. It simultaneously went to drug companies, offering them a much larger and less-volatile market for AIDS drugs in return for lower prices based on the projected higher volume. Although the foundation asked for aggressive “forward pricing” to kick-start demand, it pointedly did not ask for donations or charity. “To be sustainable,” says Magaziner, “this can’t be a charitable act.” Rather, the foundation was offering a business proposition: If we get you the demand, can you get us the supply?

EXTRACT ENDS - there's more at The Atlantic website 

In Part Three my email to Julie Bishop's office - and DFAT's frightening response.

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