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The Journal Gazette

Wednesday, June 27, 2018 5:10 pm

Fact check: The Trump Foundation vs. the Clinton Foundation

GLENN KESSLER | Washington Post

"Data doesn't lie: Clinton Foundation was 'slush fund' while Hillary was a Senator/Secretary/Pres candidate. Trump Foundation helped people in need with 100% to charities, but @realDonaldTrump voluntarily shut his down. Yet who is the sleazy NY AG suing?!" -- Trump 2020 campaign manager Brad Parscale, in a tweet, June 14, 2018

The New York attorney general's lawsuit against the Trump Foundation, alleging "persistently illegal conduct," prompted this tweet by the manager of the president's re-election campaign.

The tweet was accompanied by a chart that was headlined "Real Charity vs. 'Slush Fund.'" The chart declared the Donald J. Trump Foundation gave "100%" to charities, with "0.0%" expenses, compared with only 6.4 percent to charities for the Clinton Foundation -- and 93.6 percent in expenses, including administration, travel, salaries and bonuses.

"The difference couldn't be clearer," the chart declared.

Sounds bad for Clinton! But it has little basis in reality. Let's explore.

The facts

First of all, though both organizations have the word "foundation" in their names, they are different kinds of entities.

The Trump Foundation was a relatively small private family foundation that made specific contributions. The Clinton Foundation, by contrast, is a large public charity; it does not dole out grants but instead allocates the donations it raises directly to specified charitable activities, such as promoting economic development and global health.

So it's already a matter of apples and oranges when making simplistic comparisons about expenses.

Meanwhile, the Trump Foundation did have some expenses -- $56,163 between 2006 and 2016, virtually all ($56,000) in accounting fees, according to its tax filings. That works out to about 0.43 percent of the $12.7 million in outgoing donations in that period.

That's pretty good, but it's not 0.0 percent. Given the foundation's legal travails, one might argue that it should have spent more than $163 in legal fees in that period.

Moreover, to claim the foundation gave "100%" to charities is simply not true, unless one considers the president himself to be a charity.

As our colleague David Fahrenthold first reported in his Pulitzer Prize-winning reporting on the Trump Foundation, Trump did not donate any money to the foundation between 2008 and 2015, and most of its money was not actually his.

By law, Trump wasn't allowed to buy things for himself using the charity's money, even if he was buying them from nonprofit groups.

But Trump twice used the charity's money to settle legal disputes that involved his for-profit businesses, the New York attorney general alleged. He also engaged in other instances of self-dealing, such as paying $10,000 to buy a portrait of Trump that was found hanging in one of his golf resorts.

The foundation also donated $25,000 to a Florida political group aiding the re-election effort of Republican state Attorney General Pam Bondi -- and was used to benefit his presidential campaign, the lawsuit said.

Now let's turn to the Clinton Foundation.

Parscale's chart lists as a source a 2015 New York Post article that was titled "Charity watchdog: Clinton Foundation a 'slush fund.'"

The article was pegged to the announcement that Charity Navigator, which rates nonprofits, decided to put the Clinton Foundation on its "watch list." The group took the action after media reports raised troubling questions about the running of the foundation and the foundation spun off some entities and later bought some, according to a 2015 interview with our colleagues at FactCheck.org.

Charity Navigator said the Clinton Foundation had an "atypical business model" and that "our removal of The Clinton Foundation from our site is neither a condemnation nor an endorsement of this charity."

But the organization did not call the Clinton Foundation a "slush fund." That came from a quote in the article offered by Bill Allison, at the time a senior fellow at the Sunlight Foundation.

Allison said he was referring to media coverage, in particular a Washington Post report that revealed that Bill Clinton was paid at least $26 million in speaking fees by companies and organizations that are also major donors to the foundation.

A memo written by a top Clinton aide, leaked by WikiLeaks in 2016, further exposed the inner workings of "Bill Clinton Inc.," in which donors to the Clinton Foundation were pressed to provide personal income to the former president.

"It was highly unusual to me and ethically challenged," Allison said, adding he stood by the quote.

But he noted he made the "slush-fund" comment in the course of a 20-minute conversation.

"What was robbed from the context of the quote is that I did say that the Clinton Foundation did good work," he said.

In any case, by the end of 2015, Charity Navigator removed the Clinton Foundation from its watch list. The organization indicated that tax information made available by the Clinton Foundation, including four years of tax returns amended by the organization, as well as a public memo submitted by the group, met Charity Navigator's requirements for removal.

In 2016, Charity Navigator began listing the Clinton Foundation as a "low concern" charity, with a four-star rating, its highest rating. The Clinton Foundation currently has a score of 93.91 out of 100 for finances, accountability and transparency.

Meanwhile, Charity Navigator in 2016 issued a "high concern" advisory on the Trump Foundation after news reports the New York attorney general would investigate it and Trump would seek to close it.

The New York Post report claimed the Clinton Foundation took $140 million in grants and pledges in 2013 but spent just $9 million on direct aid, based on 2013 tax filings.

But as we explained, it is a public charity. The ratio of 6.4 percent toward charities and 93.6 percent toward expenses, suggested by the tax form and repeated in the chart, is based on a misreading of the tax documents filed by the foundation.

By contrast, the American Institute of Philanthropy's CharityWatch gives the Clinton Foundation an "A" rating, its second-highest efficiency rating, which is based on the percent of total expenses a charity spent on its programs in the year analyzed and the cost to raise $100.

For 2016, according to tax documents and audited financial statements, the Clinton Foundation spent 88 percent of its cash budget on programs, compared to 12 percent on overhead, such as fundraising, management and expenses. The organization also calculated it costs the Clinton Foundation only $2 for every $100 it raises.

In other words, the reality is almost the opposite of what Parscale portrays in his chart. Indeed, CharityWatch includes the Clinton Foundation on its list of top-rated charities.

(CharityWatch primarily rates public charities, as well as some social welfare and veterans organizations that broadly solicit the public for donations, so it does not rate the Trump Foundation.)

Parscale did not respond to a request for comment.

The Pinocchio test

Here's an example of where data can lie, if presented in a misleading fashion. Parscale's chart compares apples and oranges -- and then offers an expense-charity ratio for the Clinton Foundation that is virtually backward. One could raise legitimate questions about the Clinton Foundation without resorting to phony math -- or ignoring the well-documented issues with the running of the Trump Foundation. Parscale earns Four Pinocchios.

Four Pinocchios