The Clinton Foundation’s Behind-the-Scenes Battle With a Charity Watchdog Group

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NEW YORK, NY - MAY 15:  (L-R) Former U.S. president Bill Clinton and former U.S. Secretary of State Hillary Clinton attend the opening ceremony for the National September 11 Memorial Museum at ground zero May 15, 2014 in New York City. The museum spans seven stories, mostly underground, and contains artifacts from the attack on the World Trade Center Towers on September 11, 2001 that include the 80 ft high tridents, the so-called "Ground Zero Cross," the destroyed remains of Company 21's New York Fire Department Engine as well as smaller items such as letter that fell from a hijacked plane and posters of missing  loved ones projected onto the wall of the museum. The museum will open to the public on May 21.  (Photo by Mike Segar-Pool/Getty Images)
Photo: Pool/2014 Getty Images

Last Wednesday, Bill Clinton ratcheted up Clintonworld’s counter assault on Clinton Cash, the book by conservative author Peter Schweizer that ignited the latest media frenzy over the former First Couple’s $2 billion foundation. “There's just no evidence," Clinton defiantly told CNN's Christiane Amanpour during an interview at the Foundation’s confab in Morocco. "Even the guy that wrote the book apparently had to admit under questioning that we didn't have a shred of evidence for this, we just sort of thought we would throw it out there and see if it flies, and it won't fly."

Clinton’s analysis is flawed in at least one regard. As my colleague Jonathan Chait recently wrote, the Clintons’ web of murky relationships and opaque finances exacts a political cost whether or not their critics ever find a there there. The Clintons, more than anyone, should know that negative press — true or not — can have potentially catastrophic consequences. Remember, it was David Brock’s 1993 American Spectator article alleging that Arkansas state troopers arranged Bill’s trysts, which sparked Paula Jones’s sexual harassment lawsuit, which led to the Supreme Court case, which led to Monica Lewinsky lying under oath about the affair, which led Linda Tripp to turn the tapes over to Ken Starr, which led to impeachment.

The Clinton Foundation scandal cycle is already spinning off new complications. A case in point: After being the subject of a spate of negative newspaper accounts about potential conflicts of interest and management dysfunction this winter — long before Clinton Cash — the Clinton Foundation wound up on a "watch list" maintained by the Charity Navigator, the New Jersey–based nonprofit watchdog. The Navigator, dubbed the "most prominent" nonprofit watchdog by the Chronicle of Philanthropy, is a powerful and feared player in the nonprofit world. Founded in 2002, it ranks more than 8,000 charities and is known for its independence. For a while, the Clinton Foundation was happy to promote Charity Navigator’s work (back when they were awarded its highest ranking). In September 2014, in fact, the Navigator's then-CEO, Ken Berger, was invited to speak at the Clinton Global Initiative. Of course that was before the Foundation was placed on a list with scandal-plagued charities like Al Sharpton's National Action Network and the Red Cross.

Since March, the Foundation has embarked on an aggressive behind-the-scenes campaign to get removed from the list. Clinton Foundation officials accuse the Navigator of unfairly targeting them, lacking credible evidence of wrongdoing, and blowing off numerous requests for a meeting to present their case. "They're not only punishing us for being transparent but are not being transparent themselves," Maura Pally, the Foundation's acting CEO, told me by phone from Morocco last week. "Charity Navigator doesn't disclose its donors, but we do and yet that means we're suffering the consequences."

Navigator executives counter that the Foundation has demanded they extend the Clintons special treatment. They also allege the Foundation attempted to strong-arm them by calling a Navigator board member. "They felt they were of such importance that we should deviate from our normal process. They were irritated by that," says Berger.

The feud is a microcosm of all that is exhausting about the Clintons' endless public battles. Generally, it goes like this: bad press about their lack of transparency sparks some real-world consequence or censure, the Clintons complain that they’re being held to an unfair standard while their critics contend that they expect to be able to write their own rules, and the resulting flare-up leads to more bad press.

The trouble with Navigator started on Wednesday morning, March 11. Foundation officials became alarmed when they received an anonymous email from the watchdog's Donor Advisory committee informing them they would be added to the list on Friday, March 13, unless they could provide answers to questions raised in newspaper accounts. Among the press controversies the Navigator cited: A Wall Street Journal report that noted "at least 60 companies that lobbied the State Department during [Hillary Clinton's] tenure donated a total of more than $26 million to the Clinton Foundation.” Politico, meanwhile, revealed that the Foundation failed to report to the State Department a $500,000 donation from the Algerian government, a violation of the ethics agreement the Clintons had arranged with the Obama White House. Politico also reported that the Foundation’s former CEO, Eric Braverman, quit after a “power struggle” with “the coterie of Clinton loyalists who have surrounded the former president for decades.”

With the publication of Clinton Cash on the horizon, Clintonworld surely knew landing on the Navigator’s watch list would be a public-relations debacle. By early March, Clinton campaign officials were holding regular war-room meetings to orchestrate their defense against the book. Over the next few days, Foundation officials desperately attempted to contact Navigator executives to rebut their claims but, inexplicably, couldn’t get through to anyone on the phone. On the evening of Friday, March 13, Pally sent a detailed email rebuttal. "All of the other organizations on your watch list have had substantiated allegations of financial, fiscal or other impropriety,” she wrote, according to an email the Foundation provided to New York. “The stories you cite about the Clinton Foundation merely point to donations, or gossip around our operations, none of which constitute any wrongdoing.”

It didn't work. During a tense phone conversation on the afternoon of March 17, Pally and Berger argued over the merits of the media's claims about the Foundation. Pally said they were without substance; Berger insisted that since the newspapers published the articles, they were relevant. "Our whole thing is, if major media outlets say there's something here that you should be aware of, we're not going to be judge and jury on what the media says," Berger later told me. "We felt there had been enough questions." As a matter of practice, the Navigator doesn’t conduct its own investigations. On its website, they state: “Charity Navigator … takes no position on allegations made or issues raised by third parties, nor does Charity Navigator seek to confirm or verify the accuracy of allegations made or the merits of issues raised by third parties that may be referred to in the CN Watchlist.”

The Navigator invited the Foundation to respond publicly on their website. Instead, Pally asked Berger to meet and review confidential copies of the Foundation's handbook, “Global Code of Conduct,” and board bylaws. Berger declined, feeling it was another effort of backroom dealing and spin. "We were not opposed to having a sit-down meeting. The point was, what is it that we're going to cover? We've already been around the block. What's the value of this?"

Last week, after I contacted the Foundation about being on the watch list, Pally rekindled talks with the Navigator. "I remain at a loss as to what information we can provide to address Charity Navigator’s concerns and be removed from the Watchlist," she wrote Tim Gamory, the Navigator's acting CEO. (Berger left the group last month to start his own consulting business.)

Sure enough, the watch list designation has provided Clinton’s antagonists with more ammunition with which to attack Hillary’s campaign. Already, critics are citing Charity Navigator’s list as a reason to open a federal investigation into the Clintons’ finances. For its part, the Clinton camp sees the episode as another reason to feel aggrieved. But even some Clinton advisers have been frustrated that they don’t appear to have learned from past self-inflicted wounds. One source told me that last year, a senior adviser lobbied the Foundation to appoint a Republican co-chairman to its board, which was stacked with Clinton loyalists. The adviser submitted a list of GOP names. “It was to shield [the Clintons] from the things they’re reading about now,” the source said. “It didn’t happen.”

Unfortunately for Hillary’s campaign, the Navigator’s policy is that charities that land on the list stay there for a minimum of six months. Sandra Miniutti, the Navigator’s spokesperson, told me that, in order to get off the list, the Clintons need to publicly address each of the controversies raised by the media with a convincing response.

The clock is ticking.