Scarborough: Clinton Foundation broke its own rules not to take foreign donations

A 2012 Q&A session between Bill Clinton and Ashley Judd has surfaced as evidence in the case against the Clinton Foundation and its acceptance of foreign donations while Hillary Clinton served as secretary of state.

In the video, Clinton’s words seem hypocritical.

Here’s how MSNBC host Joe Scarborough described it on his April 30, 2015, show.

"There is a clip of Bill Clinton saying we're not going to take foreign donations because if somebody had business before the State Department, there would be an appearance of impropriety," Scarborough said. "They not only burst through what the guidelines of the White House put up, they burst through their own self-pronounced guidelines."

Scarborough is right that there's a video clip of Clinton dicussing foreign donations, but as this fact-check will show, he misleads viewers by saying it's a sign the Clintons burst through their "self-pronounced guidelines" of taking foreign donations.  

What Bill Clinton said

The 2012 interview took place at the London School of Economics. Clinton was asked by a fawning Judd about the creation of the Clinton Global Initiative -- which is, effectively, a subsidiary of the Clinton Foundation. Initiative projects range from paying for technology so that small stoves to charge cell phones, to loans for small businesses, to free Web ads to raise money for overseas development nonprofits.

As often happens with Clinton, he gave a sidewinder of an answer. But here’s the relevant portion of his response for our purposes:

"The Clinton Global Initiative meets every year. Then we do one (meeting) just on the American economy, which we will continue to do until we reach full employment. We had one (meeting) in Hong Kong for Asia, which I had to suspend those while Hillary was secretary of state for good reason. In order to do one around the world and make the economics work and keep the entry fee fairly low, you have to have sponsors. And if your wife is secretary of state and you get sponsors in another country, they may be doing it just because they believe in it, but it opens up too many questions of conflicts of interest. So we suspended those.

"But if she leaves the State Department in January, then I expect we’ll have one in 2013 in Latin America and then another shortly thereafter in Asia because they’re interested in it."

As you can see, Scarborough’s comments aren’t out of thin air. But Clinton is talking specifically about the Clinton Global Initiative. That’s an important distinction, it turns out, because of the specific guidelines set out by the Clintons when Hillary Clinton was nominated as secretary of state. 

A bevy of initiatives

The Clintons (and we say Clintons to describe them as a group, but Hillary Clinton was walled off from the organizations as secretary of state) operate several separate initiatives under the umbrella of the Clinton Foundation.  

While Hillary Clinton ran the State Department, the foundation oversaw the Clinton HIV/AIDS Initiative, the Clinton Climate Initiative, the Clinton Guistra Sustainable Growth Initiative and the Clinton Hunter Development Initiative. (The last one had nothing to do with hunting. It was named for Scottish entrepreneur Sir Tom Hunter and focused on development projects in Rwanda and Malawi.)

The foundation still runs those different programs, although it has dropped the initiative label from some of them. The point is, the Clinton Global Initiative was one of a handful of programs under the foundation’s umbrella.

The modus operandi of the Clinton Global Initiative is to act as a broker between donors and doers. It holds big meetings to bring together governments, donors, and non-governmental organizations with shared concerns. The initiative charges fees to join as members, seeks sponsors to hold these big meetings and then pushes members to make big dollar commitments to key projects.

Brian Mittendorf, a professor of accounting at Ohio State University’s Fisher College of Business who follows nonprofit filings, including those of the Clinton Foundation, said that most of the money never passes through the Clinton Global Initiative’s hands.

"CGI (the Clinton Global Initiative) doesn't implement the projects but instead acts as a ‘facilitator’ to match donors and get commitments to action," Mittendorf said. "So, those commitments are not reflected as donations to the Clinton Foundation or CGI."

To get an idea of the contrast, in 2011, the global initiative had $26 million in revenues, but boasted that it secured commitments of $7.39 billion for projects that would roll out over many years.

The promises of the Clintons and the memorandum of understanding

So now we get to the Clintons "self-pronounced guidelines."

When Hillary Clinton was nominated by Barack Obama as secretary of state in 2008, the Clinton Foundation instantly emerged as a stumbling block to her confirmation.

The Obama transition team attempted to deal with the possible conflicts of interest with a memorandum of understanding between the Clinton Foundation and the new administration. That memo created different requirements for the Clinton Global Initiative and other Clinton entities.

According to the memorandum, the Clinton Global Initiative would be spun off as a separate nonprofit entity that could take no money from any foreign government. In addition, the Clinton Global Initiative agreed not to hold any big meetings outside the United States.

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The other Clinton programs and initiatives could continue to accept money from foreign governments, but they had to report new donors or any existing government donor that decided to "increase materially its commitment."

Memorandum terms
Clinton Global Initiative

Memorandum terms
Clinton Foundation and other Clinton subsidiaries

No donations from foreign governments

Can accept donations from foreign governments, increased reporting requirements

No large meetings outside the United States

Foreign meetings allowed

This, again, is key, because Clinton was speaking only of the Clinton Global Iniative in his 2012 remarks.

Clinton Foundation spokesman Craig Minassian said the global initiative was treated differently because the initiative mainly brought funders together. As such, the global initiative did not need to collect money directly from foreign governments.

In contrast, Minassian said, a program like the Clinton HIV/AIDS Initiative -- now called the Clinton Health Access Initiative -- ran projects that delivered health care to people in developing countries.  "You couldn’t stop the money for AIDS because millions of people depended on that for their drugs," Minassian said. "Those were programs we actually implemented. No one wanted to interrupt that because it would make no sense."

So why would the Clinton Global Initiative have any need at all for funds from foreign governments? Minassian said such help made large foreign meetings possible.

"You need to be invited. You need additional police and security," Minassian said. "The host country is a key sponsor. This is not like holding a meeting at the Sheraton in New York City."

Minassian said that after a meeting in December 2008 in Hong Kong, the program limited its annual gatherings to New York City from 2009 to 2012, the years Hillary Clinton headed the State Department. The first meeting outside America took place about 10 months after she left. It was held December 2013 in Brazil.

Foreign money did go to the Clinton Global Initiative

The restriction on the global initiative applied specifically to foreign governments. However, the initiative could and did accept donations from foreign donors (Scarborough just said foreign donations, not donations from foreign governments).

There are two ways to support the initiative. Membership costs $20,000 and comes with a ticket to go to the annual meeting. Sponsors pitch in substantially more to help pay for the meetings themselves. In return, they get publicity, multiple tickets to the meeting and other perks like their own meeting room at the annual gathering.

The organization’s Internal Revenue Service filings show total revenues of $28.2 million in 2012 and $26 million in 2011. The split between member fees and sponsorships is unclear, but Minassian said those are the only two sources of revenues.

In 2011, foundations backed by Ukrainian businessman Victor Pinchuk and Dubai-based Indian Sunny Varkey helped fund the annual meeting in New York. So did the French bank Credit Agricole and Indo Gold, an Australian mining company with investments in India, Africa and Germany.

During Hillary Clinton’s confirmation hearings, senators raised concerns about any foreign entity, government or private, making donations to the Clinton Foundation. The policy for the Clinton Global Initiative that emerged from the memorandum only banned accepting funds from foreign governments, along with no longer holding large meetings outside America.

Since Hillary Clinton left the State Department, the governments of Germany, Saudi Arabia, Australia, Oman, and others have given money to the global initiative. Minassian said that now that she is running for president, that will stop, as will plans to hold gatherings overseas.

Our ruling

Scarborough accused Bill Clinton of hypocrisy, saying the former president violated his own self-pronounced guidelines by accepting foreign donations while his wife was secretary of state. As evidence, Scarborough pointed to comments made by Clinton in 2012. 

But Clinton's comments were more narrowly focused than Scarborough let on.

Clinton said the Clinton Global Initiative didn’t take donations from foreign entities while Hillary Clinton was secretary of state because it opens questions of conflicts of interest.

That prohibition is outlined in a memorandum of understanding signed by the foundation and the Obama administration. There is, as of yet, no accusation that the initiative broke that term of the agreement.

As far as the other Clinton programs and initiatives, the Clintons were permitted to collect donations from foreign governments. But they did agree to increased reporting requirements, though the Clinton Foundation says it failed to meet the reporting requirements in some cases.

In short, there are serious questions about how the Clinton Foundation reported foreign government donations.

But Bill Clinton’s 2012 interview provides little extra fodder -- beyond a juicy soundbyte -- for those questioning the Clintons’ decision to take foreign government money.

We rate the claim Mostly False.