Internal Report: How The Clinton Foundation Broke Federal Law

The Clinton Foundation operates outside of the legal standards that govern non-profit organizations, according to an internal report drafted by the former Chief Counsel to Vice President Al Gore.

“The challenges and deficiencies plaguing the Foundation cannot be over-stated,” lawyer Kimuki Gibson wrote to Foundation chairman Bruce Lindsey in the conclusion of her two-month, seventeen-page assessment of the Clinton Foundation. Her review was recirculated as an attachment to Chelsea Clinton, Cheryl Mills, and John Podesta in 2011 and released by Wikileaks on November 5th.

Gibson states that the Clinton Foundation is “missing several policies and procedures that are required by law (e.g., record retention policy)” and she bluntly advises that the Foundation “must act immediately to bring the Foundation into compliance with the law and standards that govern not-for-profits.”

As a not-for-profit, the Clinton Foundation enjoys tax-exempt status under Section 501(c)(3) of the Internal Revenue Code. According to the details within Gibson’s report, the Clinton Foundation was in serious violation of the three major tenants that define charitable organizations. Let’s take a look at how, according to the IRS and Gibson.

1. A tax-exempt charitable organization “must be organized and operated exclusively for exempt purposes,” meaning that all work performed is done in service of the stated charitable mission.

According to Gibson’s review, the Clinton Foundation does not have a  strategy in place for carrying out any sort of coherent charitable mission:CFSTRATEGY

2. A tax-exempt charitable organization “must not be organized or operated for the benefit of private interests, and no part of a section 501(c)(3) organization’s net earnings may inure to the benefit of any private shareholder or individual.”

According to Gibson’s review, the activities of the Clinton Foundation – far from being centered around the advancement of a charitable mission – were determined  by the independent interests of former president Bill Clinton:CF_2_inure

3. Finally, a tax-exempt charitable organization “may not be an action organization, i.e., it may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.”

The tendency of the Clinton Foundation to devolve into a political campaign, either literally or through the atmosphere, is mentioned three separate times in Gibson’s report, most importantly in regards to the Harlem office:campaign2

One must wonder if the real reason FBI agents sought a probe into the Clinton Foundation is for these documented abuses of the federal tax code.

This possibility seems increasingly likely, given that a Dallas branch of the IRS is currently reviewing the tax status of the Clinton Foundation.

Stay tuned.

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