Clinton and Trump: A tale of two foundations
One of the many differences between the two presidential candidates this election year is in the foundations that bear their names. One is a charity that has saved millions of lives around the world. The other is basically a scam that uses funds donated for charity as a personal piggy bank for the man whose name is attached.
The Clinton Foundation gets an “A” rating from Charity Watch and a four-star rating from Charity Navigator. It has helped 11.5 million people around the world receive reduced-price HIV/AIDS drugs. It consists of 11 nonprofit groups that work on four major issues: global health and wellness, climate change, economic development, and improving opportunities for girls and women.
Yet a baseless story from the Associated Press — now not even online anymore because of its inaccuracies — about supposed special access for Clinton Foundation donors who met with Hillary Clinton when she was secretary of state kept the foundation in the headlines for weeks, delivering negative publicity and feeding into the media’s favorite “If it’s Hillary Clinton, it must be untrustworthy” meme.
The reporting on the Clinton Foundation has been so awful that when people answered questions in a UCLA survey about what the charity does, the answers ranged from booking speeches for the Clintons to handling the family’s money. Both of which are not even close to being true. From the story in The New York Times:
Among people who thought they could answer a question about what the foundation does, more than half (56 percent) think that setting up speaking engagements for the Clintons is one of its activities. This answer was chosen more than any other, including the charitable activities the foundation actually is engaged in, like combating AIDS in Africa (47 percent chose this answer), providing schoolchildren with healthful food choices (29 percent), and helping girls and women through education and training (43 percent). Although some money from the Clintons’ speeches ends up at the charity (and the Clintons may speak on behalf of the charity), booking speeches is not a central activity of the Clinton Foundation.
More surprising, 39 percent of registered voters think the Clinton Foundation manages the personal finances of the Clinton family, and 40 percent also think the foundation gives money to Democratic candidates. (It does neither of these things.)
American journalism is not at its finest in this election. Except, perhaps, from David Fahrenthold of the Washington Post.
So now let’s look at the Trump Foundation, which keeps its records so secret that it doesn’t have a website and obviously can’t match the good works of the Clinton Foundation. Trump and his surrogates repeatedly brag that he has given millions to charity out of his own pocket. Yet the Pulitzer Prize-worthy reporting from Washington Post reporter Fahrenthold, who has been digging into the Trump Foundation since February, shows that the foundation’s supposed donations to charity barely exist. Fahrenthold contacted 250 charities (he’s now up to 346) with ties to Trump since 2008 and found only one that received money from the Orange Menace.
Instead, the Trump Foundation has given money in the form of a campaign donation to the Florida attorney general. Miraculously, after Attorney General Pam Bondi received the donation, she dropped the investigation of Trump University. Another Fahrenthold story explains how that worked, including the fact that Trump had to pay the IRS a penalty for the illegal donation to Bondi’s campaign. (A similar situation occurred in Texas, when Trump donated money to the Texas attorney general’s campaign, but that money came from his own pocket.)
What else does the Trump Foundation do? It took over a quarter-million dollars from money donated by others for charitable purposes and used it to settle lawsuits facing Trump’s for-profit businesses. Another Farhenthold story gives the details. It’s a practice known as “self-dealing,” and, in case you were wondering, yes, that’s illegal. (And don’t forget the foundation money that was used to purchase a signed football helmet from Tim Tebow and paintings of the would-be narcissist-in-chief himself.) From the Post story:
More broadly, these cases also provide new evidence that Trump ran his charity in a way that may have violated U.S. tax law and gone against the moral conventions of philanthropy.
“I represent 700 nonprofits a year, and I’ve never encountered anything so brazen,” said Jeffrey Tenenbaum, who advises charities at the Venable law firm in Washington. After The Washington Post described the details of these Trump Foundation gifts, Tenenbaum described them as “really shocking.”
“If he’s using other people’s money — run through his foundation — to satisfy his personal obligations, then that’s about as blatant an example of self-dealing [as] I’ve seen in awhile,” Tenenbaum said.
Several charity law experts told Talking Points Memo that Trump’s egregious use of foundation funds “are obvious violations of the law and even have the potential of getting the Trump Foundation shut down,” a TPM story said.
The tax implications are two-fold, according to experts. The charity itself benefits from a tax-exempt status, and those who contribute also get to deduct their donations from their taxes.
Private foundations — which rely on large contributions from a few donors — are bound by strict regulations so they do not become devices that wealthy people use to avoid paying taxes, the experts said. Beyond a reasonable salary for the work he or she does for the charity, a disqualified person cannot participate in any sort of financial transaction, charity law attorneys told TPM.
“Self-dealing is prohibited, and the kind of self-dealing with the Trump Foundation is somewhat remarkable in its breadth,” said Jim Fishman, a professor at The Elisabeth Haub School of Law at Pace University in New York, who teaches courses on nonprofit law.
The Trump campaign is claiming that Fahrenthold’s excellent stories have been “inaccurate,” although they have not been able to point to any details that were wrong. Trump was asked by a reporter in Ohio about the Foundation’s financial shenanigans, and Trump gave a word-salad answer worthy of Sarah Palin:
“The foundation is really rare. It gives money to vets. It’s really been doing a good job. We put that to sleep just by putting out the last report.”
Of course, a lot of questions about charitable donations could be answered if Trump would only release his taxes. Guess this is just one more reason why those taxes are still under wraps.