An arm of the Clinton Foundation that was spun off into a separate charity in 2010 appears to have suffered from years of accounting problems, in addition to those disclosed this week by the more well-known Clinton Foundation.
The Clinton Health Access Initiative, a Boston-based group that once made up the largest part of the Clinton Foundation, has refiled some of its tax forms multiple times in an effort to correct reporting mistakes.
The Clinton Foundation’s highly-publicized tax refiling earlier this week was quietly matched by a refiling of three years of CHAI returns as well.
While the Clinton Foundation put out a guide to understanding the amended tax forms and provided statements from both its president and accountant Monday, CHAI posted new returns online to little fanfare the same day.
However, it was not the first time the health charity had refiled its returns. CHAI’s 2012 form, for example, was refiled in January 2014 and again on Monday to correct additional mistakes.
According to a previous version of CHAI’s 2012 return obtained through the New York State Office of Attorney General, the form was amended last year because mistakes had been made on the 2011 return that affected the 2012 one.
Unlike the Clinton Foundation, CHAI does not list earlier versions of amended tax returns on its website. The health charity does not mention that the some of the tax forms posted on its website have been altered and refiled at least twice.
The revisions included downsizing the amount of money CHAI supposedly paid board member Bruce Lindsey. In fact, between last year’s return and the one filed this week, CHAI reduced its reported employee “compensation” from more than $1.5 million to $786,000.
In all, nine different amounts were adjusted up or down the first time the 2012 return was amended in Jan. 2014.
Earlier this week, CHAI changed 17 amounts and updated another section where it should have disclosed ties to other charities, such as the Clinton Foundation, but did not.
CHAI also amended its 2013 return “in order to more accurately distinguish government grant” income from other kinds of donations, the forms said.
Critics have questioned the failure of both the Clinton Foundation and CHAI to list their government grants, given that Hillary Clinton served as secretary of state in the years those contributions went unreported and that such grants could be viewed as a conflict of interest for the charities.
What’s more, the accounting firm that handled CHAI’s tax returns, BKD, has been cited by the Federal Deposit Insurance Corporation for allowing fraud to take place in a bank the firm was auditing.
Charles Ortel, a financial analyst, said CHAI was “the driver of everything” the Clinton Foundation did for years, before the two entities began filing separate returns in a legally questionable split.
Ortel said a major “fraud risk factor” occurs when nonprofits consistently refile their returns due to reporting mistakes. He noted the frequent changes to CHAI’s forms should raise a “huge red flag” for any trained accountant.
“You can’t tell part of the truth in a filing,” Ortel said.
Indeed, the American Institute of Certified Public Accountants includes the alteration of documents and the omission of certain financial information on tax forms among its list of warning signs for fraud.
CHAI came under fire earlier this year after reporters uncovered millions in foreign contributions that were not properly reported to the State Department or on past returns. Both the Clinton Foundation and CHAI, which was not then a stand-alone group, were required to disclose donations to the State Department under an agreement with the White House that was meant to shield Hillary Clinton from potential conflicts of interest.
Although CHAI vowed in April to perform a review and refile the returns in light of the media scrutiny, a spokesperson for the charity walked back that pledge earlier this month, touching off a firestorm of criticism that included a formal IRS complaint filed by the Republican National Committee.
CHAI then agreed to refile its returns, under pressure to adhere to its original plan to complete the review by the IRS’ Nov. 16 deadline.
However, press releases and statements put out on that day dealt with the Clinton Foundation and largely ignored CHAI’s amended returns, despite the fact that it was discrepancies within CHAI’s reporting that led to the controversy in the first place.
The Clinton Foundation was placed on a charity watch list in March following a spate of stories that questioned the legitimacy of the organization’s charitable operations.
Groups are required to stay on Charity Navigator’s list for a minimum of six months.
The Clinton Foundation is no longer rated by the charity watchdog.
