The Washington Post reports on the foreign governments that gave millions of dollars to Hillary Clinton’s family “charitable foundation” during her tenure as Secretary of State, during times when those foreign governments were actively engaged in various negotiations or transactions with various agencies and instrumentalities of the U.S. government, including some dealings that involved, at least on a collateral level, the Department of State headed by one Hillary R. Clinton.
Quite apart from the brazen effort to buy influence through private benefits provided to a high official’s affiliated entity, there is the question of just where all this money ended up.
You see, the Clintons’ foundation doesn’t just sit on the money it rakes in. It spends it. Some of it, I’m quite comfortable, is honestly spent doing Good Work here, there, and elsewhere, and spent actually doing stuff like buying bricks to build schools in sub-Saharan Africa, or actually buying crates of vaccine against whatever disease. Bully for them. But where else does the foundation spend money? Who are its employees? Who are its “consultants”? To what other “charitable” organizations does it transfer money, and where do those organizations spend their own money. These questions are necessary to ask because the “charitable” organization racket is unusually susceptible to use for political money laundering.
Let’s say that Company X is given to understand that a $10 million donation to the — he’s dead, and was undoubtedly a crook while alive (he was under active investigation by the FBI when he died), so we’ll just slime him — Murtha Family Foundation (my apologies if any such entity actually exists; I’m just using this as a hypothetical illustration) would be well-received, at a time when Company X is trying to sell Product Y or Program Z to the federal government. The size of the contract is $750 million over the course of five or six years. Get this contract, in other words, and the future of your company for that period of time is assured. You might even be able to sell it for a couple hundred million dollars, cashing out and going to do whatever. So Company X fades $10 million to the foundation. The foundation then takes some portion of that — let’s be really optimistic and just say 60% of it — and actually goes out and buys textbooks for rural school districts or whatever. That still leaves $4 million, however. Now, private foundations are restricted on what they can pay insiders and their relations, so maybe John Murtha’s nephews, grandchildren, and cousins can’t realistically be paid more than $175,000 per year or so . . . each. What do they do? Well, they have titles like “marketing director,” or “community development coordinator,” and so forth. But what do they physically, personally, do on a day-to-day basis? Well, Grasshopper, you’d have a hard time answering that question, because other than occasionally standing up after a Rotary lunch to gas on to a bunch of somnolent businessmen quietly belching and wondering if they’re going to make their 1:30 meeting back at the office, you can’t really tell they’re doing much of anything other than cashing a paycheck twice a month.
But hist! What’s this? Why, the foundation has a $300,000 per year “consulting” agreement with, let’s call it Coalfield Strategies, LLC, to provide hazily-defined “services” to the Murtha Family Foundation. But who is “Coalfield Strategies, LLC,” anyway? Why, it turns out when we look at the secretary of state’s filings that “Coalfield Strategies, LLC” shows a principal place of business in the same building as one Fred Q. Zimmelfritz. And lo! when we examine the campaign financial disclosures of John Murtha and his affiliated political organizations, we find that Fred Q. Zimmelfritz is a major donor to all of them, to the extent of around $200,000 per year. And if you do a little digging here and there, you find that companies with business in front of John Murtha’s Congressional committees seem to have a pressing need for services of the nature provided by Coalfield Strategies, LLC.
When we look closer at the Murtha Family Foundation’s other vendors, we find that “Steamtown Industrial Services, Inc.” is providing cleaning services to the foundation under an annual contract which, when you look at how much office space actually needs cleaning and how long it ought to take to clean it, works out to something like $250 per hour. Really? That kind of money to empty the trash can, dust the window frames, and vacuum 800 square feet of floor? All of which is performed twice a week by someone getting paid $13.25 per hour? And when we look a bit closer at “Steamtown Industrial Services, Inc.” we find the name of Thaddeus R. Golatznik; returning to those same campaign financial disclosures we find that name as well high on the list of donors.
And so forth.
Don’t think stuff like this actually happens? Gentle Reader will recall that before he became Governor Lothario, Elliot
Spit-hole Spitzer was Attorney General Lothario of the State of New York. While in that office he made a name for himself for “investigating” various publicly-traded companies in different industries. The insurance industry was a favorite target. But Lothario’s office gained a reputation for leaking that they were “investigating” Company X or Industry Y . . . even though as things not at all infrequently turned out, no charges or civil proceedings were ever initiated against Company X or anyone in Industry Y.
Company X was invariably a publicly-traded company, and Industry Y was invariably populated by publicly-traded companies. When word leaks out that the New York state attorney general is “investigating” Company X, with vague (always vague) hints at massive exposure to fines and penalties (and of course defense costs), what happens to Company X’s stock? Right: It drops by 15%, or however much. And then what happens? Company X gets served a complaint filed by Major Securities Class Action Litigation Firm, asserting all manner of Rule 10b-5 violations for failure to disclose that Company X was engaging in Behaviors A, B, and C, thereby failing to make a material disclosure necessary to make the other disclosures made not misleading under the circumstances.
What are Company X’s options at that point? They’ve now got bet-the-company choices to make. Even if they’re really comfortable that they did nothing illegal and can beat any proceeding actually brought by Lothario’s office, the illegality of the undisclosed behavior is not an element of a Rule 10b-5 action, and a judgment entered in that action can easily drive them to a choice between bankruptcy or forced sale. They have to settle that class-action suit. So they settle. By the time the expenses of the suit are paid out of the recovery, each shareholder gets $0.28539 or some other piffling amount per share. The law firm, however, is awarded several million in fees. Company X is now out from under the securities litigation. And a couple of months later, Lothario’s office quietly lets it be known that there doesn’t appear to be any basis for further proceedings, and Company X’s stock goes back up. Everyone’s happy at that point, right?
Well of course they are, because the partners at Major Securities Class Action Litigation Firm, several of whom just happen to be major campaign contributors to Lothario, can now count their money, and begin writing checks to the campaign coffers of . . . wait for it! Attorney General Lothario.
So while interesting in its own way, that WaPo article stops well short of asking all the questions that need to be asked and answered. If in politics the ultimate question is always cui bono? then until we know who is feeding at the Clinton foundation’s trough we do not know to what extent this trail of foreign money does or does not taint the woman who wants to be our next president. We do not know to what extent the political operations and operatives of the would-be president are effectively on the payroll of some very, very unsavory foreign governments.