The 21 pages deleted from The Clinton Foundation's 2005 IRS tax-exempt annual return
Thursday, 08 September 2016
Twenty one pages filed with the IRS have been deleted from the Clinton Foundation 2005 annual tax return material published at the Clinton Foundation website.
Under the heading Annual Reports, Financials & Tax-Exempt Materials the Clinton Foundation website reads:
The Clinton Foundation is committed to transparency and accountability throughout its work. This page includes the Foundation’s annual reports, audited financials and annual tax filings, tax-exempt status filings and certifications.
The "annual tax filing" on the webpage for 2005 is here
On 9 June 2006 the accounting and audit firm BKD LLP of Little Rock Arkansas wrote to the Board of Directors, William J. Clinton Foundation LLC Inc.
We have audited the accompanying statements of financial position of William J. Clinton Foundation, Inc. as of December 31, 2005 and 2004 and the related statements of activities and cash flows for the years then ended. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of William J. Clinton Foundation, Inc. as of December 31, 2005.
There is no mention of a merger, proposed merger or merger agreement in the 9 June 2006 audit of the Clinton Foundation's 2005 financial year.
BKD was also involved in preparing the Foundation's IRS Form 990.
After receiving the 9 June audit report, the Clinton Foundation stalled for a further 5 months before submitting the 2005 990 IRS return.
Visitors to the Clinton Foundation website wouldn't know any of that. Laid out sequentially at Clinton's site is the audit report, management accounts, supplementary information with a seamless flow into the IRS 990 return. It superficially looks unremarkable, as if 6 months after the balance date of 31 December it was all done and dusted.
Two of the missing 21 pages missing from the Clinton version were requests for 3 month extensions of time to file the return.
CFO Andrew Kessel's first application for a 3 month extension was automatically approved, taking the due date out to 15 August 2006.
On 24 July 2006, 6 weeks after the audit was finalised, he told the IRS a further 3 months was needed "to accumulate the information necessary to file a complete and accurate return", taking the due date out to 15 November 2006.
Kessel signed a statement subject to the penalties of perjury about the reason he required the extension.
The application for extra time was assessed by the Field Director for Submissions to the IRS at its Ogden Branch. With the audited financials finalised in early June after a purported 31 December merger (which, if it had occurred, should have included a full set of audited accounts on settlement) a further 5 months to 'accumulate information' appears difficult to justify.
On 14 August the IRS Field Supervisor approved the extension with an instruction to include the application and approval for the extension in the 990 return.
On Tuesday we published this article about the previously unreported IRS filing made by the short-lived Clinton Foundation HIV Aids Initiative Incorporated.
Tuesday, 06 September 2016
Documents obtained by this website suggest that the Directors of the Clinton Foundation and the Clinton Foundation HIV/Aids Initiative Inc may have falsified a merger agreement and backdated documents by more than 12 months to deceive the IRS, donors and others about the Foundation's HIV activities.
In 2005 ,the William J. Clinton Foundation (31-1580204) and the Clinton Foundation HIV Aids Initiative Inc (20-0921629) (CHAI) were separate legal entities and thus required to lodge individual IRS returns. Each operated as a 501(c)(3) charitable tax exempt foundation.
Download Clinton Foundation HIV/Aids 2005 990 and Merger Agreement
EXTRACT ENDS
The situation for the Clintons looked bad on Tuesday. It looks worse now.
This is the version of the 2005 990 IRS return published at the Clinton Foundation website
Download Clinton Foundation 2005 990 (with "Audit" material)
This is the actual document submitted to the IRS
Download Clinton Foundation 2005 IRS
The submitted version's footer - printed 27 October 2006 (filed on 3 November 2006)
The version displayed at the website wasn't printed until 2 months later.
Two of the 21 missing pages are the applications for extensions of time.
The others are in two legal agreements filed with and as part of the 990 IRS annual return.
The 2005 IRS 990, includes this question
Statement 17 tells us
The following 14 pages were filed with the IRS, the last page is signed by Andrew Kessel the Chief Financial Officer. Not the Board. Not a Trustee. Just the CFO. Who was doing the tax return.
Download Clinton Articles as at 2005 filing
I don't know about the detail of American law, but in Australia a backdated document is a backdated document. No amount of retrospective approval changes the nature of a document which tells a lie about itself by stating it was created on a date different from the actual date of its creation.
Article VI of the amended bylaws approves retroactive approval (ie backdating the approval) for anyone to enter into any contract or execute and deliver any instrument as may be "necessary" to carry out the purposes of the Corporation - as long as that person has the Board's confidence at the point in time he or she "remembers" what they did.
I have never seen so general or unlimited authority to do what you want when you want as long as you remain in favour.
The Clinton Foundation had a powerful, perhaps overpowering personality as its disbarred non-fiduciary figurehead. As distasteful as it is to mention and recall the circumstances, Bill Clinton has a background of lying under oath and disbarment from practicing law as a result of that habit. This Foundation's Trustees were trusted by Clinton "to carry out the purposes of the Corporation" - even when it wasn't clear until after the event what the exigencies of the corporation might require.
It may be that on 25 March 2005 Mr Kessel signed Page 14 of the document that's presented as having been given the authority of the Board on that day.
His signature on the jurat "these By Laws are adopted this 25th day of April 2005" could have been appended at any time. If it suits, maybe next year the Board might retroactively approve a different version of history where another version of the bylaws created later on the afternoon of 25 April is put forward by a more favoured son, superseding those produced for the IRS 990 submitted on 3 November 2006 by Mr Kessel.
That version of the bylaws was alongside this controversial merger agreement of two Clinton entities in the 2005 IRS 990 submitted on 3 November 2006.
Download Articles of Merger Clinton
Forgeries are sometimes difficult to prove. Sometimes investigators get a break if someone kicks an own goal.
In early 2006 the Clinton Foundation was keen to set up operations in Papua New Guinea after the February 22 Memorandum of Understanding with Australia.
Disbarred lawyer and non-fiduciary to the eponymous Foundation Bill Clinton might have had authority to sign the MOU at the time and he might have signed for the Foundation of for the Initiative Inc. We'll have to ask the Board after they've been told what they retroactively approved. Or unapproved later. Retroactively.
At 8.38AM on 28 August 2006 the following version of what happened at the 25 April 2005 meeting to amend the Articles of Association was filed with the PNG Companies Regulator.
Fortunately for the PNG companies regulator, this version of the amendments includes certificates and certifications from authorities in Arkansas made at the time. It seems a bit more reliable than some of the stuff that went in with the belated 2005 Form 990 which announced an 11 month old merger.
Clinton Foundation amendments 25 April 2005
It's possible that other amendments to the Articles or the ByLaws were enacted at that 25 April 2005 meeting and not included in the amendments certified by the regulator at the time. The date of Kessel's letter is significant. 22 February 2006 is the date Bill Clinton signed the MOU with Australia. Given that he was not a fiduciary, a written explanation of any authority to sign would have been a useful inclusion in the certified package.
Doing business with an entity that can't be sure of its true nature because of an unknown pending retroactive approval a Board might make must be very difficult.
I don't think I'd be donating any money to it.
More soon, there are more details to come.