Media reports — likely based on leaks from special counsel Robert Mueller’s team — now suggest that President Donald Trump’s personal lawyer, Michael Cohen, may be the target of an investigation into bank fraud and federal election reporting violations.
In the end, truth may out, but in fairness, Mueller, Deputy Attorney General Rod Rosenstein, and former FBI Director James Comey must explain why each of them missed much larger criminal activity involving the Clinton Foundation when these three men supervised an investigation that opened by February 2001 and ran through 2005.
Clinton Foundation’s disappearing debt shuffle. If we are to believe public filings submitted to the IRS under penalties of perjury, an entity known today as the Bill, Hillary & Chelsea Clinton Foundation borrowed $28.5 million on Feb. 20, 2004 — see page 30.
Yet the foundation’s accounting firm, BKD LLP, issued on June 9, 2006, “Independent Accountants’ Report and Financial Statements” that contradict earlier IRS filings by claiming that proceeds from the $28.5 million in borrowing arrived at the Clinton Foundation by Dec. 31, 2003, or 51 days before the loans were actually secured.
Changing the date of these substantial borrowings is a significant matter because doing so has allowed Clinton Foundation trustees, executives, BKD, and other professional advisers to mask the apparent theft of at least $28.5 million.
To see this clearly, visit page seven, where proceeds totaling $10,350,000 from two other loans are shown as a source of cash from financing during 2004, but $28.5 million in additional proceeds are missing.
What is particularly surprising is that the FBI and Department of Justice (DOJ) were actively investigating the Clinton Foundation before, during and after Feb. 20, 2004. So how did investigators and prosecutors avoid finding obvious bank and wire frauds?
Missing evidence helps unravel mysteries. The Clinton Foundation provides signed copies of federal income tax returns that are marked “received” by the IRS for 1998 through 2002, but not for 2003, 2004 and 2005 on its website.
By entering the name “Bill, Hillary & Chelsea Clinton Foundation” into the Propublica Nonprofit Explorer website, you will find two versions of a report on Form 990 concerning 2003. These two versions were sent across state lines to the IRS and also sent across state lines to numerous regulators during 2004.
An initial Form 990 for 2003 was signed May 14, 2004, by Clinton Foundation President Skip Rutherford under penalties of perjury and received in the Ogden, Utah, IRS office on May 21, 2004. An amended version was signed by Rutherford on Sept. 17, 2004, and received in Utah on Sept. 19, 2004.
Both versions of the Form 990 for 2003 claimed in Part IV, in answer to question 64b, that no mortgages and other notes payable were outstanding on Dec. 31, 2003, and both versions claimed, in answer to question 66, that no liabilities were outstanding on Dec. 31, 2003 — see column B.
On Sept. 23, 2005, Rutherford signed a report to the IRS on form 990 concerning 2004, which was received in Ogden, Utah, on Oct. 8, 2005. This report confirmed information contained in the initial and amended reports for 2003 that there were no mortgages, debts or liabilities outstanding on Dec. 31, 2003 — see Part IV, questions 64b, 66, in column A.
VIP supporting details in the Form 990 IRS filings. On page 30 of the 2004 Form 990, the Clinton Foundation claims that it obtained a $26,499,870 “line of credit” from Bank of America,” secured by “pledges receivable,” to be used for “construction” on Feb. 20, 2004.
Yet at that time and through Dec. 31, 2005, the Clinton Foundation did not keep track of “pledges receivable” in its financial statements, a fact that you can’t fully appreciate since these financial statements (available elsewhere) explicitly do not account for any receivables or payables, an approach that is not allowed.
How did Bank of America approve such a large loan with no obvious collateral, and why did the Clinton Foundation pay only 4.17 percent a year in interest on this loan, a rate that seems well below market?
Also on Feb. 20, 2004, Metropolitan Bank extended a $1,980,000 note to the Clinton Foundation secured by “property” to be used for “Museum Store Remodel.”
So, according to these details, repeated in later years in subsequent IRS filings that were also sent to state regulators, the Clinton Foundation had no long-term debt outstanding on Dec. 31, 2003, and $28,479,870 in long-term debt outstanding on Dec. 31, 2004.
Clearly, the Clinton Foundation received proceeds of $28.5 million from long-term bank borrowings during 2004, that is, if sworn reports to the IRS concerning 2003 and 2004 are truthful.
Past time for real Clinton Foundation probes. Though the FBI’s 2001 to 2005 Clinton Foundation inquiry failed to yield a single indictment, evidence of criminal activity was and remains abundant in the public domain. Indeed, Clinton Foundation crimes should have been prosecuted years ago, thereby stopping evolution of this charity fraud to its present gargantuan proportions.
An uncontrolled and unaudited “charity” run by political partisans offers potential for donors to claim tax deductions on “charitable” contributions that more likely fund primary and general election contests.
Trump has every right — and indeed an obligation — to root out epic charity frauds and violations of campaign laws that Mueller, Rosenstein and Comey “missed.”
Charles Ortel, a retired investment banker, concentrates on exposing complex frauds in his new career as an investigator, writer and commentator. Since August 2017, he has been hosting the “Sunday with Charles” podcast and covering the Clinton Foundation case in depth, using publicly available source materials. To view his previous LifeZette contributions, go here.