- The Washington Times - Tuesday, February 6, 2001

The unprecedented $300,000-a-year subsidy former President Bill Clinton has offered to help rent a penthouse office on fashionable 57th Street in New York City will come from tax-exempt donations intended to build and endow his presidential library in Little Rock.
The unique arrangement, announced to end criticism of renting luxury offices that cost more than those of all other living former presidents combined, was not described to potential donors of the William J. Clinton Presidential Foundation, who were asked to build the presidential library. The New York rent subsidy may run afoul of complex regulations of the Internal Revenue Service and Arkansas' charities watchdogs.
Skip Rutherford, a longtime Clinton associate who is unpaid president of the Arkansas-based foundation, yesterday defended using donations for the library and museum to pay office rent estimated at $650,000 a year because Mr. Clinton will wear more than one hat there.
"The president will be spending some significant time on issues regarding the Clinton Foundation, so it's appropriate that part of the rent and office costs be paid for by the foundation," Mr. Rutherford told The Washington Times.
The president's chief of staff, Karen A. Tramontano, justified the arrangement on the basis that the former president would be "pursuing philanthropic endeavors" from that office, including foundation projects.
Foundation tax filings from 1998 and 1999, the organization's first two years, show it took in $6,185,038 as of Dec. 31, 1999 97 percent from big donors who are not identified and spent $441,049. It hired its first two staff members Thursday and had few expenses.
The city of Little Rock is to donate the land, if it can clear up a challenge to condemnation procedures. Mr. Rutherford suggested the library might be moved if that gift falls through.
Fund-raising letters seeking gifts of $35 and more, signed by former White House Chief of Staff Thomas F. "Mack" McLarty and former Sen. Dale Bumpers, dwelt on research aspects of the library, which is to be completed by 2004.
Never before has a presidential foundation chipped in for rent on government-provided offices, but no former president has ever chosen such high-profile digs $80 a square foot per year.
The General Services Administration will not discuss a pending lease until it is signed, a spokeswoman said yesterday.
Mr. Clinton's office characterized the $300,000 annual payment for the yet-unspecified life of the lease as a "contribution."
An Internal Revenue Service spokesman wouldn't discuss specifics but pointed to complex IRS rules for all such groups that accept donations exempt from taxes under Section 501(C)(3).
The regulations limit passing donations on to others, particularly when a beneficiary such as Mr. Clinton is active in partisan politics.
"However, former President Clinton expects to spend significant time pursuing philanthropic endeavors, including projects on behalf of the Clinton Presidential Foundation," Miss Tramontano said in a letter to GSA acting Administrator Thurman Davis justifying the arrangement.
"Accordingly, the foundation has agreed to provide $300,000 annually towards the cost of the space at Carnegie Hall Tower for the term of the lease. When this contribution is taken into consideration, the cost for which GSA will be responsible is comparable to that of former President Reagan's office," Miss Tramontano wrote.
The foundation's goal is to collect $80 million to $100 million to build the library and museum in a 27.7-acre "park" on the Arkansas River bank at the end of a short stretch of a street renamed President Clinton Avenue.
In the first two years, small donations totaled only $185,007. Mr. Rutherford would not discuss how much was collected in 2000.
Direct-mail solicitations became urgent in 2000 to meet the IRS requirements that public support be at least 10 percent, and up to one-third in some circumstances averaged over four tax years.
IRS filings required of all tax-exempt organizations describe the foundation's primary exempt purpose this way: "To design, construct, and initially endow a presidential archival depository, to house and preserve the books, correspondence, documents, papers, pictures, photographs and other memorabilia of President Clinton."
Direct-mail solicitations seeking small donations emphasize the library's role as a place where historians, academic researchers and journalists will document Mr. Clinton's "important legacy … that needs to be preserved."
Mr. Rutherford declined to discuss any aspects of contributions not required to be reported to the IRS, including amounts of future pledges by philanthropic groups or the identity of donors, some of whom have pledged individual gifts of $5 million or more.
"We do not disclose donors. We follow the precedent set by Ronald Reagan during his second term, the way they handled it, and we sought their advice and counsel," Mr. Rutherford said.
"If donors choose to make their contributions public, that's certainly their prerogative, but it's up to them," he said in the interview.
Mr. Rutherford detailed a three-part foundation strategy: to create the library-museum, which will be turned over to the National Archives and Records Administration; to set up the Clinton Center, as an umbrella for the former president's involvement in policy issues at home and overseas, along with the Clinton School; and to start a master's degree program in public service through the University of Arkansas, but based in the Clinton Library.
"Foundation activities are going to be conducted out of the New York office, and we're not going to wait until the library is finished in late 2003 or 2004 to begin the Clinton Center policy initiatives," he said.

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