Foreign grants to Clinton charities spur questions of transparency
The Clinton Foundation is known for annual New York meetings where corporate leaders, celebrities, and global do-gooders listen to talks about big ideas during the day, then mingle in swanky midtown hotels to help solve the world’s problems. Relationships sprout. Business deals form. All under the banner of the former first family’s charitable causes.
It’s a world away from the brick building in South Boston where the most muscular workhorse among the network of Clinton charities is headquartered. The offices, on the same block as a Gold’s Gym, a hair salon, and Super Shine Auto Wash, are home to the Clinton Health Access Initiative — a $100 million-a-year entity that accounts for almost 60 percent of spending in the Clinton charitable empire.
Dedicated to reducing the cost of health care in Africa and other parts of the Third World, it embodies the great social promise of Bill Clinton’s nonprofit ambitions. Yet it simultaneously provides ammunition to critics who question the degree to which political and financial influence tend to go hand in hand in the world of Clinton charities, as well as the lack of transparency about those relationships.
While Hillary Rodham Clinton was secretary of state, foreign donations sharply accelerated to this arm of her husband’s charitable works, enabling its operations to grow by 75 percent from 2010 to 2013, according to tax forms reviewed by the Globe. Government grants, nearly all from foreign countries, doubled to $55.9 million in 2013 from $26.7 million in 2010, according to the records. Contributing countries included Papua New Guinea, the United Kingdom, the Netherlands, and Australia.
Donations also flowed in from multinational corporations with interests before the State Department, wealthy business leaders, and friends of the Clintons — including Hewlett-Packard Co. and Ethiopian-Saudi hotel billionaire Sheikh Mohammed Hussein Ali Al Amoudi.
As Hillary Clinton begins her presidential campaign, the overlapping relationships in the Clinton family charities are coming under closer scrutiny. The nexus of companies, foreign governments, and charitable contributors are being used by Republicans to bash Clinton. How she and her allies explain it will be crucial in determining how much weight the attacks carry with voters.
On Wednesday, the Clinton Foundation announced it would increase the frequency of its disclosure of donors from annually to quarterly. It will limit foreign donations to those that have already given to foundation programs. The health initiative plans to issue a donor disclosure policy as well.
The health initiative is chaired by Bill Clinton, with daughter Chelsea and several Clinton loyalists, including Bruce Lindsey, also on the board. Hillary Clinton has never been on the board.
Day-to-day operations at the organization are overseen by Ira Magaziner, the architect of Hillary Clinton’s failed health care reform legislation and a friend of Bill Clinton going back to their days as Rhodes Scholars at Oxford University. Magaziner’s total compensation as CEO, along with fees paid to his consulting company from a separate Clinton venture, was just shy of $400,000 in 2013, according to tax filings.
Magaziner said Hillary Clinton’s position as the nation’s chief diplomat from 2009 through 2013 played no role in government, corporate, or personal contributions to the Clinton Health Access Initiative, or the marked increase during that time. He said the money nearly doubled because of the quality of the programs that improve delivery of health care — especially lowering the costs of drugs that treat AIDS — in the world’s poorest nations.
“When we’re funded for something, it is a very detailed proposal,” Magaziner said. “It would be very hard to claim there was an alternative motive on the behalf of a foundation or government giving us money,” said Magaziner, a Rhode Island resident who rarely speaks to the media.
He said that for many of the grants, his charity conducts fund-raising separate from the other Clinton charities and applies for money intended to pay for specific projects.
The Clinton Health Access Initiative is best known for negotiating with generic drug makers in India to reduce the cost of AIDS drugs in such countries as Mozambique and South Africa. The work includes helping poor countries forecast their drug needs, developing systems to distribute the medicine, and prodding them to band together to buy in bulk.
“These people were really devoted to — if not bringing the pandemic to the end — to limiting the impact,” said Stephen Lewis, a Canadian AIDS activist and former UN special envoy for AIDS in Africa. “They did wonderful things on the ground.’’
Lewis was a board member from 2010 when the organization spun off from the Clinton Foundation, and left in 2013. He worked with Bill Clinton as well as health care pioneer Paul Farmer, who still is on the board. Farmer’s nonprofit, Partners in Health, is a donor, giving giving between $1 million and $10 million, records show.
The Clinton Health Access Initiative — with more than 300 employees worldwide and hundreds more volunteers — has turned down $30 million to $40 million of grants because it has grown so quickly in the past few years that it lacks the capacity for the additional work, Magaziner said.
Yet, a lack of promised transparency at Clinton’s health charity generated a recent round of negative news. The Clinton Health Access Initiative failed to disclose its donors from 2010 to 2013, violating an agreement Hillary Clinton forged with President Obama as a condition of becoming secretary of state, an omission first reported by Reuters.
The foundation on Feb. 6 released an incomplete list of contributors that provides general ranges of support, but lacks specific dates and doesn’t reveal the identities of individuals who collectively contributed less than $1 million.
Because the disclosure came after Clinton left the State Department, the public had little chance to learn, while she was secretary of state, that foreign contributions to her husband’s charity were accelerating.
Magaziner called the failure to disclose “an oversight.” He said he erroneously believed the Clinton Foundation was including the health initiative’s donors on its website.
Additionally, State Department ethics reviews that were called for under Hillary Clinton’s agreement with the Obama administration in the event that foreign government donations to Clinton charities “materially increased,’’ never took place, the Washington Post reported in February.
Nick Merrill, a spokesman for Hillary Clinton, declined to comment for this story.
Donations from foreign governments and corporations with interests in State Department operations are already giving Republicans fodder.
“The Clinton Foundation’s repeated disclosure failures, potential conflicts of interest, and unethical practices call into question Clinton’s ability to lead and who she may be beholden to in the White House,” Republican National Committee Chairman Reince Priebus said.
A Globe review of donors to the Clinton Health Access Initiative provides some prominent examples of overlapping interests. Hewlett-Packard gave the initiative as much as $10 million and provided the Clinton Foundation as much as $5 million. At the same time, it had contracts from the State Department and lobbied its officials, according to a government spending database and HP disclosure forms.
Executives at HP said they got to know the health initiative’s leaders during the 2010 Clinton Global Initiative annual meeting that September. Within two months, the company agreed to work with the Clinton Health Access Initiative on a project to help digitize medical records in Kenya.
It went well, and Bill Clinton offered glowing words about “HP’s technology and expertise,” and predicted it would “save the lives of more than 100,000 infants in Kenya each year.”
A year later, in October 2011, HP was showcased by the United States Agency for International Development, a wing of the State Department, during a weeklong celebration intended to promote companies that work with government agencies. An HP executive, Gabi Zedlmayer, said in a 2011 blog post that the company had a “strengthened alliance” with the State Department intended to “bring new life, scope and impact to our working relationship.” She specifically noted the company’s work with the Clinton Health Access Initiative , among other charities.
The following year, Hillary Clinton named the company as a partner in a new Quadrennial Diplomacy and Development Review she launched, asking the company to bring its “business eye to taking on social and environmental problems in developing markets.”
Maura Daley, a spokeswoman for the Clinton Health Access Initiative, said there was no connection between work done for the initiative and recognition by the State Department. HP didn’t respond to multiple requests for comment.
The deeper relationship didn’t translate into more work for HP from the State Department. Hewlett Packard contract payments from the department fell from 2010 to 2014, according to USA Spending, a government website that tracks federal contracts and grants.
Another company, German drug maker Bayer AG, announced in September 2012 that it planned to reduce the cost of contraceptive drugs by roughly half in some poor countries. The reduction was a joint effort that included work by the Clinton Health Access Initiative, USAID (an arm of the State Department), Norway, the United Kingdom, Sweden, The Children’s Investment Fund, and The Gates Foundation.
Three months before this big announcement, USAID awarded Bayer a $4 million sole-source contract to spray insecticides in Ethiopia. It was one of only three USAID contracts that the drug maker was awarded from 2008 through 2013, according to the government spending database.
Daley said the contraceptive initiatives were separate from work Bayer did for the State Department. Bayer spokeswoman Rosemarie Yancosek said the contraceptive efforts and paid work in Ethiopia “were developed independently” and “have no connection to each other, except for reinforcing Bayer’s position as an innovative, global life sciences company.”
For the most part, the Clinton Health Access Initiative has avoided being the direct recipient of US taxpayer funds, Magaziner said. There’s one exception. In 2010 the initiative was awarded a $6.7 million grant from the Centers for Disease Control to streamline operations at 15 public hospitals in Ethiopia. Magaziner said the group accepted that grant because it was a project that the initiative was particularly well-suited to take on.
The Clinton Health Access Initiative was launched in 2002 after Bill Clinton tasked Magaziner to meet with scores of foreign leaders to determine how the Clinton Foundation could help combat poverty.
The president of Mozambique explained that he had to hire two people for every government opening because so many staffers were dying of AIDS. Others offered similar themes: Help us with the scourge of AIDS. The project, initially called the Clinton HIV/AIDS Initiative, was run out of Magaziner’s offices in Quincy.
Early encouragement came from former South African president Nelson Mandela, though bringing down the price of drugs wasn’t an obvious cause for Clinton to embrace. In 1997, Mandela signed a law that angered pharmaceutical companies because it allowed South Africa to import HIV/AIDS medicines from countries where the same drug sold for a lower price.
The Clinton administration sided with US drug companies and put South Africa on a trade watch list in 1998 and 1999.
Under pressure from AIDS activists, Clinton reversed course in 2000. But by then, Mandela had been replaced by President Thabo Mbeki, whose views on AIDS included the unfounded position that some of the most effective drugs were actually dangerous.
“I do wonder how the world would have been different if Nelson Mandela hadn’t been stopped. Clinton had stalled progress for just long enough,” said Paul Davis, the director of Global Campaigns at the AIDS nonprofit Health Gap, and one of the activists who protested Clinton administration policies.
The Clinton Health Access Initiative’s success reducing drug costs has been a redemption of sorts for Clinton on AIDS, he said. “We are grateful they had the desire to make good things happen once they were out of office,” Davis said.
Correction: A quotation from a Hewlett-Packard executive in this story is not recent, and was from a 2011 blog post. Hewlett-Packard did not respond to multiple requests for comment in recent weeks.