Mark Tapscott | Executive Editor, Chief of Investigative Group
Six years afore she became the axial amount in the IRS’s actionable targeting of Tea Party tax-exemption applicants, Lois Lerner austere the way for the Clinton Foundation’s transformation from architecture a presidential library to actuality a $2 billion all-around political access peddling machine, according to abstracts acquired by The Daily Caller Account Foundation’s Investigative Group.
She helped achieve this accomplishment through a 2007 letter on two acknowledged issues of such consequence that it’s absurd the Clinton nonprofit could accept become what it is in 2017, 20 years afterwards its creation.
The aboriginal affair anxious an contrarily banal aural alliance of two nonprofits, while the additional affair centered about an aberrant amplification of the foundation’s activities far above its tax-exempt mission.
“You afresh furnished us admonition that the Clinton Foundation HIV-AIDS Initiative, Inc. alloyed with The William J. Clinton Foundation on Dec. 31, 2005,” Lerner wrote in an April 5, 2007, letter to the above president’s non-profit. “Based on the admonition submitted, we accept bent that the alliance does not affect your tax absolved status.”
Lerner was responding to a Dec. 28, 2006, letter to the IRS from Clinton Foundation Chief Executive Officer Bruce R. Lindsey. She fabricated no acknowledgment in her acknowledgment to a key book in Lindsey’s letter, which acclaimed that “the Clinton Foundation HIV-AIDS Initiative continues to use its Employer Identification Number (EIN) …”
The IRS provided the Lerner and Lindsay Letters on May 11, 2017, to the Cause of Activity Institute, a nonprofit government babysitter that represents TheDCNF in collective Freedom of Admonition Act (FOIA) activity apropos Clinton Foundation tax documents.
Continued use of the IRS-provided EIN should accept been a red banderole for Lerner because the HIV-AIDS Initiative accomplished to abide as a acknowledged article in the merger. She would accept accepted this actuality from the Plan of Alliance filed with Arkansas authorities. Lindsey gave the IRS a archetype of the Articles of Alliance Certificate issued by Arkansas Secretary of State Charlie Daniels, but not of the Plan of Merger.
Section II of the Plan of Alliance provided that “on the able date of the merger, all of the buying interests in the Initiative shall be annulled and all of the outstanding associates interests in the Foundation shall be all of the issued and outstanding associates interests in the Foundation.”
Section III provided that “at the time of the merger, the abstracted actuality of the Initiative shall cease, and the actuality and character of the Foundation shall abide as the Surviving Nonprofit Corp.”
In added words, the HIV-AIDS Initiative’s EIN should accept aished into the history books at that point because the alignment it represented no best existed. But Lindsey said the foundation accepted to abide appliance the disbanded Initiative’s EIN.
Federal tax rules crave a new EIN be created back a nonprofit becomes a “subsidiary” of accession nonprofit but doesn’t crave it if the nonprofit becomes a “division” of another. However, the Initiative became neither a accessory or analysis — it became dead.
“Lerner should accept brash Lindsey that use of the Initiative’s EIN afterwards its annihilation would be illegal, but she didn’t, either because she didn’t t the acceptation of the affair or she wasn’t anxious about how Lindsey planned to use it,” accommodating tax law able Charles Ortel told TheDCNF.
Ortel is a former managing administrator of Dillon, Read & Co. in New York and was active in advertisement accumulated artifice at GE in 2009.
It’s accessible Lindsey alone discussed connected use of the Initiative’s EIN with the IRS afore the April 5, 2007, letter, but the tax bureau is battling in a federal cloister TheDCNF’s Freedom of Admonition Act appeal for all abstracts associated with the Clinton Foundation’s tax-exempt status.
The Initiative accomplished to abide accurately in 2005, but aural a few months, it active agreements with the governments of Australia and Papua New Guinea for them to pay for hundreds of millions of dollars for HIV-AIDS drugs.
The additional affair additionally hangs on what Lerner didn’t say in her 2007 letter. Besides the merger, Lindsey told the IRS that “the activities of the William J. Clinton Foundation accept been broadcast to accommodate activities in accession to the activities declared in Allotment II, branch 1 of Anatomy 1023 filed in December 1997.”
That branch batten alone of designing and architecture the Clinton presidential library, which was completed in 2004. Lindsey’s 2006 letter listed seven new areas of activities — several of which had in actuality amorphous as aboriginal as 2001.
While the Lindsey letter appears to be the aboriginal time the IRS was told about the new activities, the foundation had been agilely manipulating its mission description in its anniversary tax acknowledgment for years. (RELATED: Clinton Foundation Deceived The IRA About Its Tax Absolution From The Start.)
The new activities included, for example, “programs in assorted adopted countries, agitated out in affiliation with and beneath the advocacy of the governments of those countries, to abetment in accouterment affliction and analysis for persons, abnormally children, afflicted with HIV and AIDS.”
There were additionally to be programs in the U.S. and across to admonition victims of accustomed disasters, to “provide absolute educational and bread-and-er development opportunities in the developing world,” to “combat altitude change,” to “address the botheration of adolescence obesity,” to “provide abstruse abetment and cardinal admonition to baby businesses in burghal areas,” and to host a “non-partisan meeting” of political and business leaders from about the apple “to abode all-around problems, with anniversary actor asked to accomplish a claimed allegation to booty some anatomy of absolute action.”
None of these activities were covered in the foundation’s 1997 Anatomy 1023 appliance for tax exemption, nor were they covered by the Jan. 29, 1998, IRS approval of the nonprofit’s absolved status. Lindsey’s advertisement of the crooked activities in the 2006 letter to the IRS suggests affair on his allotment and added foundation leaders that the new programs appropriate specific approval to be tax-exempt.
But Lerner said annihilation about the new programs in her acknowledgment to Lindsey, conceivably arch him to anticipate her blackout represented official approval. Annihilation in IRS regulations, however, encourages or endorses a “silence is consent” article with attention to activities that aren’t already covered beneath a tax-exemption.
An bearding Clinton Foundation columnist appointment official told TheDCNF that the non-profit is not appropriate to seek IRS approval for new activities, citation a Louisiana State University law professor. The IRS Media Relations Appointment promised responses to TheDCNF’s questions but they were not accustomed by announcement time.
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