The Clinton Foundation’s Problems Are Deeper Than You Think

In recent days, large amounts of criticism have been directed at the Clinton Foundation over its fundraising methods, and purported ethical conflicts of interest arising out of Hillary Clinton’s tenure as Secretary of State. Stated most strongly, the allegation is that Clinton’s position as Secretary helped her squeeze foreign governments for Foundation donations, and access to the State Department was sold to the highest bidder. And while “pay to play” charges remain unconfirmed, it’s certain that the Foundation raised money from foreign governments in ways that present a troubling ethical problem for a likely future president.

Democrats have vigorously defended Clinton and the Foundation. Supportive journalists have insisted the story amounts to nothing, and Donna Brazile has objected to the tendency of journalists to treat “normal behavior” (like granting special access for large donors) as somehow worthy of disapprobation. Some have cited this as an example of what they call the “Clinton Rules,” whereby behavior that is engaged in routinely by other politicians is treated as uniquely pathological when done by the Clintons.

One major reason that the “pay-for-play” story has failed to stick, then, is that many people simply don’t see what the big deal is. Sure, Clinton may have collected Foundation donations from human rights violators across the planet. And sure, giving large donations to the Foundation may have made it easier to secure a meeting with a Clinton. But, it is said, since these were charitable donations to a foundation that does a lot of good work, what’s the harm?

It is almost a requirement that any criticism of the Clinton Foundation be followed immediately by a qualification about how much Good Work it does. Even Glenn Greenwald has said that it is “beyond dispute” that the Foundation does a great deal of good work. (Instead, Greenwald points out how likely it is that Saudi Arabia donated to the Foundation in the belief doing so would confer favor, rather than because the Kingdom felt an intense commitment to the Foundation’s stated goals of empowering women and improving LGBT rights.) James Carville has said that “somebody is going to hell” for criticizing the fundraising practices of such a worthy organization (Carville’s remark echoes previous comments by Madeleine Albright that Bernie-supporting women belong in hell; “Our opponents will burn in hell” is evidently becoming the unofficial Clinton campaign motto.)

But critics of the Clinton Foundation may want to think twice before casually paying tribute to the organization’s tremendous good work. Most of the claims about the Foundation’s efficacy have little basis in any actual reported facts. Instead, it is simply assumed that the organization has tremendous humanitarian accomplishments, without any serious inquiry into what these are. An examination of the actual available evidence, as opposed to the PR claims of the Foundation and its boosters, suggests the need for far greater skepticism about the organization’s charitable acts in addition to its fundraising.

First, the Clinton Foundation is a strange type of “charity” to begin with. The New York Times has described the Foundation as “more a nonprofit global consulting firm than a traditional philanthropy.” Contrary to James Carville’s claim that the Foundation is “taking money from rich people and giving it to poor people,” its primary mission, says the Times, is “not to provide direct humanitarian aid.” Instead it “is known for sending bright but inexperienced recent graduates to work as technical advisers to government ministries.”

Ira Magaziner, who heads the independent Clinton Health Access Initiative, has said of their work that “the whole thing is bankable… It’s a commercial proposition. This is not charity.” Instead of aid, the Clinton Foundation spends much of its effort “creating new markets,” finding lucrative investment opportunities in the developing world for Western private capital. These have included everything from “using business methods to streamline fertilizer markets in Africa” to “working with credit card companies to expand the volume of low-cost loans offered to poor inner city residents.” (Note that typically, enticing poor people into taking on large amounts of credit card debt is not among the activities of a charitable foundation.) Bill Clinton is open about the fact that in this work, he is trying to help corporations profit from the developing world. He attempts to “reinvent philanthropy” as a lucrative enterprise for his partners because, in his words, “I think it’s wrong to ask anyone to lose money.”

It’s hard to keep track of all the “commercial propositions” the Foundation is engaged in, because it operates in a highly unusual fashion. Ordinarily, charitable foundations make grants to outside organizations. But only 15% of the Clinton Foundation’s spending is on charitable grants. Instead, it spends most of its money on its in-house programs, whose efficacy can be far more difficult to track. The task is made even more difficult thanks to the Foundation’s ongoing allergy to transparency.

Partly because of that, Charity Navigator, a watchdog group, at one point added the Clinton Foundation to its watch list of problematic charities, and for many years did not rate the organization at all because its “atypical business model. . . doesn’t meet our criteria.” The Clinton Health Access Initiative has refused to allow the charity evaluation organization GiveWell to analyze its outcomes, and the Better Business Bureau has listed the Clinton Foundation as failing to meet the basic standards for reporting the effectiveness of its programs. Bill Allison of the pro-transparency Sunlight Foundation has gone much further, and said that the organization operates as a “slush fund for the Clintons.”

Indeed, certain Foundation expenditures have appeared unduly lavish, and difficult to justify. The Foundation spends $8 million in annual travel expenses (the Clintons fly on private jets), bought a first-class plane ticket to bring Natalie Portman (and her prized Yorkie) to an event, and funds a “glitzy annual gathering of chief executives, heads of state, and celebrities.” Some costs are outsourced to others, and universities that invite Bill Clinton to speak can find themselves hit with unexpected invoices for $1,400 hotel phone bills and $700 dinners-for-two.

The annual summit of the Clinton Global Initiative has become, according to some, particularly unseemly. NPR’s Adam Davidson, who has moderated panels at the CGI, has professed a skepticism of how much good is actually done, suggesting that the Foundation offers a “theater” of charity without the actual results:

There is a real creepy vibe there. It’s all about buying access. It’s incredibly expensive. It costs hundreds of thousands to go, and you meet all these people selling their private equity start-ups. You spend more money to get more access. There is this creepy theater that happens where you have a big CEO up there with President Clinton bathing each other in love about how generous and wonderful they are and how much they care about the world…’ It feels like the worst version of an elite selling access to the aspirational, creating a theater of doing good, but it is all about something else. It really feels gross.

Davidson suggests that the CGI is the “performance of public charity, not actual intervention.” (He also points out that, even if the pay-to-play charges are baseless, it is thoroughly unwise for a presidential candidate to be “beholden to scumbags.” Since many human rights violators have given the Clinton Foundation large amounts of money, Clinton will assume the presidency owing favors to dictators.)

Davidson’s judgment is shared by others who have looked into the Foundation. Journalist Carol Felsenthal, who has extensively examined Bill Clinton’s post-presidency, suggests that he feels the need to appear to be involved in charity as part of a “striving for respectability” aimed at restoring his image after the public disgrace that marked his last years in office. Clinton, she says, has made no secret of the fact that with his Foundation work, he is “angling for the Nobel Peace Prize”; he is a person who “feeds off public acclaim,” and therefore needs a successful charity to helm. Indeed, the Foundation certainly brings Bill Clinton himself both luxury and adulation. Lawrence O’Donnell has offered a particularly acidic take on Clinton’s philanthropy:

It’s all self-glorifying. If we wanted to sit down and say ‘Let’s construct a path for glorification of Bill Clinton in a postpresidential environment,’ we could say ‘It would be great if he did a lot of good works in Africa.’ Look. My resistance to being impressed by Bill Clinton’s charitable work comes from his obvious, desperate desire for me to be impressed by it. And his extremely calculated desire for me to be impressed by it. This is a person as calculating about public image as exists in the world.

A publicity-oriented approach to charity has clear human consequences. In the Clinton case, we can see these in Haiti. After the devastating Haitian earthquake in 2010, both Clintons were heavily involved in the recovery. Bill was given such large and nebulous authority that Haitians dubbed him “Le Gouverneur,” fearing he would become a sort of colonial administrator. The Clintons raised millions of dollars, including 30 million dollars through the Foundation, to assist the Haitian people.

But all of this money produced very little. Multiple expensive initiatives went nowhere, and the gleaming new industrial park the Clintons touted for Haiti brought few jobs and was largely unused. Instead of housing, the Clinton-led recovery built needless new luxury hotels. Indeed, Adam Davidson reports that the Clinton Foundation is not a major force in Haiti, and is not making any significant progress there. Journalist Jonathan Katz says it’s “hard to find anyone who looks back on [the recovery] as a success.” The Clintons themselves have simply stopped discussing Haiti publicly, though Haitians have occasionally showed up at Hillary Clinton’s office to protest the disappearance of millions of dollars in recovery funds. As one Haitian official who worked with Bill Clinton put it, “There is a lot of resentment about Clinton here. People have not seen results. . . . They say that Clinton used Haiti.” (More details on the Haiti debacle can be found in Doug Henwood’s My Turn, as well as my own book on Bill Clinton.)

But what about the Foundation’s domestic programs? These constitute the bulk of its work; despite the Clinton Foundation’s prominent promotion of its “global” programs, only 1/3 of its spending is on initiatives outside the United States. But here, too, Foundation work seems to disproportionately spend on staff rather than actual aid. A commenter on Inside Philanthropy, who works in public health, explains how the Foundation attaches its name to community health initiatives without actually materially assisting them:

The Clinton Health Matters Initiative (CHMI) is a domestic community health program located within one city/county in 5 states. Businesses like GE and Humana write million dollar checks to the Clinton Foundation to support the implementation of these local initiatives, but none of the money actually goes toward the work. I attended the so-called “CHMI convening” in Houston, TX. The Foundation representatives held an all day meeting during which the participants were to develop a wish list to improve the community’s health. They said “don’t worry about the cost.” We thought this was great news: more community health resources. Everyone assumed that the Foundation and GE would be funding the work, which would produce community health jobs, but we later learned that the Foundation does not fund its own projects. It committed no budget, staff, or office space to develop the Initiative but hired merely one person, a regional director to oversee the work. The money that GE, the corporate partner, donated toward the Initiative went to the Foundation’s coffers, not the local projects…

Under the CHMI model, each health indicator is assigned 5 goals, totaling 45 that Foundation claims will be reached within a brief 5 year period. There is no way any organization can accomplish that many goals without adequate funding and staffing. The Clinton Foundation should be ashamed of misleading these communities into thinking that it will fund and support the implementation of this massive work.

The Clinton Foundation has a powerful name that most city governments and corporations want to be associated with, but how can it claim to be serious about community health when it doesn’t fund its own projects or give grants to existing local public health organizations? The Clinton Foundation exploit these communities to get corporations to write huge checks. Everyone gets excited that it’s coming to town. The corporation improves its brand through association. the Foundation improves its bottom line, but the community’s health gets short changed. It’s a hustle, a brilliant and legal one, but still a hustle.

As we read things like this, it may be tempting to conclude that the Clinton Foundation is little more than Potemkin philanthropy, a vast, wasteful, occasionally useful apparatus that exists largely to make Bill Clinton look good and help Bill Clinton’s friends find investment opportunities in Africa. But that would be slightly unfair. It’s not that the Clinton Foundation’s charitable works are fraudulent or nonexistent. It’s that it seems highly likely that they are not doing anywhere near the kind of good they insist they are. The Clinton Foundation and its offshoots are plagued by internal dysfunction, and one of its primary expenditures has been the massive Bill Clinton Presidential Library. It has spent increasing portions of its budget on salaries over the years, and decreasing portions on the distribution of low-cost pharmaceuticals.

We must consistently bear in mind the relevant metric: it is not whether the organization has good works it can point to, it is whether it is spending its money well. Asked to account for the the whereabouts of various dictators’ contributions to its operations, the Foundation may well point to a warehouse it built in Malawi. And indeed, all other things equal, it is better to have a warehouse than not to have one. But if one is working on a hundred-million dollar budget, building a warehouse may still amount to a gross squandering of funds.

Foundation defenders have been quick to point out that the organization spends most of its money on programs, as well as the A rating it received from CharityWatch. But this misses the crucial point; it’s not about the fact that you spend your money on programming, it’s what that programming actually does. Likewise, CharityWatch rating does not actually look at what’s relevant, namely what the organization has gotten for its money.

Clinton supporter David Corn points out that when we ask these questions of the Clinton Foundation, we find no obvious answers:

Has it mounted projects that have failed? We don’t know. Does it have a lot of highly paid staff? Yes, it does. But maybe that’s justifiable, if the results are strong enough… Still, rendering an ultimate verdict is tough. It’s a pity that, as is often the case with many nonprofits, the results of its high-minded efforts are not fully verified in a manner that could transcend agenda-driven political squabbling.

Of course, Corn assumes that the Clinton Foundation’s lack of transparency is a mere oversight, a bug rather than a feature. He does not consider the possibility that the Foundation’s failure to disclose the results of its work is because there are few results to disclose. Still, Corn’s article is worth reading. Here we have a strong supporter of Clinton making the best case for the Foundation’s impact. Corn clearly began with the intention of shifting the focus from the organization’s fundraising to its verifiable accomplishments. And yet despite his best efforts to defend the Foundation’s good work, he found it impossible to produce much in the way of measurable results.

The possibility that the Clinton Foundation fails to achieve much makes it even more objectionable that the organization has extracted money from smaller, less wealthy philanthropic groups, offering to have Bill Clinton speak at their fundraising events in exchange for their donating huge sums to the Clinton Foundation. The head of one small school-building charity, which tried to get Clinton to accept an award at its annual fundraiser, was told by Clinton Foundation that “they don’t look at these things unless money is offered, and it has to be $500,000.” If the Clinton Foundation is doing less with its money than comparable organizations, then by siphoning money from other charities, the Foundation is actually harming charitable efforts.

It is understandable that the Clinton Foundation’s fundraising practices have drawn the bulk of the scrutiny; after all, its good works are universally praised and the pay-to-play allegations raise serious ethical questions. But the Foundation is also suspiciously uninterested in explaining its actual accomplishments. Its most touted achievement, on AIDS drug pricing, comes from the separate Health Access Initiative and not the Foundation itself. And some of its work appears to consist of helping loan companies find new impoverished people to lure into debt. Considering Adam Davidson’s testimony that the Global Initiative is a way for rich people to feel good while making money, and Ira Magaziner’s admission that the Foundation’s work has little to do with charity, it is worth expanding our inquiry beyond fundraising. The Clinton Foundation’s problem is not just how it makes its money, but how it spends it.

Portions of this article have been adapted from the book Superpredator: Bill Clinton’s Use and Abuse of Black America.