- - Thursday, August 29, 2013

Long before his startup green-car business ran into a series of scandals, Terry McAuliffe was trustee of a world-famous charity that in two straight years burned through $317 million in donations and grants and ended up with a $43 million deficit.

News of deficits at the William J. Clinton Foundation during 2007, 2008 and 2012 first surfaced in an Aug. 13 article in The New York Times. The Times depicted a foundation in turmoil, as special interests elbowed one another over programs and Hillary Clinton’s presidential bid. Despite the deficit in 2008, the foundation paid for a first-class plane ticket the following year to shuttle actress Natalie Portman and her terrier to an event in Austin, the Times reported.

Mr. McAuliffe, the Democratic gubernatorial candidate for Virginia, signed on to the board of directors of the William J. Clinton Foundation back in 2000. Mr. Clinton founded the organization in 1998 to “strengthen the capacity of the people in the United States and throughout the world to meet the challenges of global interdependence,” according to a tax return.

Mr. McAuliffe has been uncharacteristically mum on the public thrashing of the foundation’s finances. Three days after the article appeared, Mr. Clinton posted a letter on the foundation’s website taking issue with the report’s content.

He highlighted the successes of the foundation throughout the world and called last year’s $8 million deficit incorrect and based on unaudited numbers.

The “correct figure is actually a surplus,” he said.

As for 2007 and 2008, “When someone makes a multi-year commitment to the Foundation, we have to report it all in the year it was made,” he said, calling the deficit misleading because it was actually made up in subsequent years.

According to Corporation Wiki, the foundation only has three directors on its board: Mr. McAuliffe, Chelsea Clinton and Stephanie Streett, who is responsible for running Mr. Clinton’s presidential library in Little Rock. Tax returns show various other directors through the years. No current return is available.

Just one person remained constant — Mr. McAuliffe, the only professional fundraiser of the group.

“(Chelsea) and I have been very involved since Day 1,” Mr. McAuliffe told The New York Times in a July 31, 2007, article about his role with the foundation.

In 1999, The Washington Post noted that the foundation’s pet project — building Mr. Clinton’s presidential library— was “being overseen by first friend Terry McAuliffe.”

Mr. McAuliffe made his name in 1992 as the fundraiser for Mr. Clinton’s presidential campaign. That was followed by Mr. Clinton’s re-election campaign and the campaigns of Hillary Clinton for U.S. Senate and president. In 2001, Mr. McAuliffe became leader of the Democratic National Committee, raising $578 million in four years and leading it out of debt for the first time.

In 2007, the foundation brought in revenue of $129 million and had expenses of $140 million. The following year, the revenue was $188 million with $217 million in expenses. Last year, the numbers were $214 million and $223 million respectively, according to tax returns and a financial report on the foundation’s web site.

A detailed list of its donors and expenditures was not listed on the tax forms. However, the 2005 report did note that the foundation had bank accounts in 11 foreign countries, including China. By 2007, the list had grown to 26.

Mr. McAuliffe does not take a salary for his position and has remained on the board every year except 2009, when he first ran for governor in Virginia, failing in the primary. In 2001, he increased his commitment at the foundation from 2.5 hours per week to five hours per week. In 2005, he cut back to two hours per week, the tax forms indicate.

These days, Mr. Clinton says his nonprofit may have been too ambitious.

“(P)rojects were still running too much like stand-alone startups,” Mr. Clinton said in his statement after the recent article in The New York Times. “They were very effective but not sustainable over the long run.

“Like many foundations, we were hit by the economic slowdown in 2007 and the crash in 2008. Thankfully, we had the cash reserves to cover our largest budgets, in our HIV/AIDS, malaria, and health training programs.”

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