INVESTIGATION: "Clinton Foundation Not Suitable For Charity Organization" - Financial Investigators

welcome to you all pursuant to committee

rules all witnesses will be sworn in

before they testify so if you will

please stand and raise your right hand

do you solemnly swear or affirm that the

testimony that you're about to give is

the hold the truth the whole truth and

nothing but the truth so help you God

all right thank you please be seated

let the record reflect that the

witnesses answered in the affirmative in

order to allow time for discussion and

quite frankly for a Q&A that you'll get

quite a bit of your entire written

statement will be made part of the

record but we would ask that you would

limit your oral testimony or opening

remarks to five minutes there's a clock

in front of you to remind you of that

it'll turn yellow when you have 30

seconds left if you'll please make sure

that you press the button when you're

speaking and so what we will do is is we

can we can you know have your own

opening testimony a combined 10 minutes

so however you want to do that and so

mr. mr. Doyle will come to you first and

then what you can yield to mr. Monaghan

I would like to yield to mr. Moynahan to

open please okay so mr. Moynahan you are

recognized for up to 10 minutes in Thank

You chairman like to thank you chairman

meadows and other members of the

committee for having us here today my

name is John Moynihan and I'm one of

three partners that engaged in this

investigative effort involving a 501 C 3

and in particular the Clinton Foundation

the subject today's hearing please note

that we do many investigations into 501

C 3 s and this is just one of many

when I'm finished I'd like to introduce

my two colleagues that are here today

mr. Doyle and if it's possible mr.

Thomas Ragland from the clock hill law

firm tom has been very active with us in

our efforts as we move through this at

the conclusion mr. Doyle's introduction

I would like to answer two questions for

the committee why are we and why did we

do this I think that gives some good

color and background as to what we're

doing how we do this for a living what

our motivations are and why we're here

I'd like to give at this point some

special thanks the three other

individuals who worked on this matter

mr. Robert Nieves who was behind me

who's a senior SES executive US Drug

Enforcement Administration where I

worked for many years with mr. Nieves on

money laundering and financial crimes

mr. John Shiro from the law firm of bata

Chandu II is a master tax analyst

fiduciary and trust advisor in the field

of taxation and investments mr. Thomas

scandal an attorney at a law firm in

Massachusetts was a litigator who

challenged us the entire process our

evidence and the way we went about this

to ensure the integrity of what we're

going to talk about today at this time

I'd like to yield to mr. Doyle

congressman meadows and members of the

committee thank you very much for the

invitation to present and discuss the

topic relating to the oversight of

nonprofit organizations with a specific

case study on the Clinton Foundation

my name is Larry Doyle and for purposes

of background John Moynihan and I are

the two proudest graduates of the

College of the Holy Cross the jesuit

jesuit inspired pursuit of the truth

competitiveness and playing by the rules

have been our calling cards and our

commitment throughout John's career in

and around loss law enforcement in mine

on Wall Street for the last ten years

I've spent countless hours involved in

literary and investigative pursuits

related to regulatory failure the

comparisons I see between the subprime

mortgage market lack of ratings and

regulatory performance and the Madoff

scandal to today's topics are stark

on that note I welcome providing the

following context and perspective for

today's hearing

they are currently approximately 1.75

million not-for-profit organizations in

our nation today 90% of these

not-for-profits fall within the 501 C

subset while close to two-thirds are 501

C 3 public charities recent data

highlights that these not-for-profits

annually gener

generate approximately 1.7 four trillion

with a T dollars a 250 percent increase

over the last 20 years equating it to

approximately 9% of our nation's GDP on

a standalone basis this segment of our

economy would be the tenth largest

economy in the world

all of which begs the question who's

minding the store looking out for the

donors and upholding the rule of law

but it's quick you want to introduce Tom

yeah at this point at this point mr.

chairman like mr. Raglan to introduce

himself at this point I'd like to answer

two questions who are we we are a

political we have no party affiliation

to this whatsoever

no one has financed us I don't know Jim

and Meadows I just met him today I don't

know any of you people okay I'm happy to

meet you but we have no relationship to

any of you okay we have forensic

investigators that approached this

effort in a nonpartisan professional

objective independent way we have never

been policin we come from law

enforcement of Wall Street where each of

us has dedicated I've entire lives and

careers to the rule of law doing the

right thing pursuing facts we follow

facts that's all

none of this is our opinion I emphasize

none of this is our opinion these are

not our facts they are not your facts

they are the facts of the Clinton

Foundation why did we do this this is

our profession people will ask us are

you doing this for money the answer is

yes this is how we make a living we do

cases it's that simple we have forensic

investigators former US law enforcement

and private practice making our living

conducting these cases we did not choose

this topic because of who the

individuals are or were in fact we

applaud the efforts of the philanthropic

nature of the Clinton Foundation on some

of the efforts that they have done

that's not in dispute

we're not here to dispute that rather we

have backgrounds in 501c3 charities

including work for both inside and

outside of them we know the risks in the

frequent short Falls 501 C 3 501 C 3 s

have been found to be particularly

vulnerable to abuse and a lack of

oversight especially on the global front

we share a deep and profound commitment

to protecting taxpayer dollars in that

context we saw the controversy

surrounding this entity as

a significant amount of monies including

US tax dollars that were flowing through

this foundation we decided in financed

out of our own pocket to examine this

ourselves we also firmly believe that no

one is above the rule of law regardless

of party and those who occupy senior

positions in our government or a special

duty it's important to stress that we

have not made any conclusions and to set

the record straight we do not have a

lawsuit against anybody we don't have a

complaint against anybody we have a

submission of probable cause to the IRS

that said we use the FOIA quite

substantially and other tools at our

disposal to gain quite a bit of public

and non-public information all of the

information was obtained completely

legally into the various tools of

Investigations that we have at this time

what we would like to do in an

expeditious fashion is to state in

bullet form the process we went through

and to state our findings that are in

our submission to the IRS it is a

complex issue this significant amount of

information but let it be said our claim

is a tax claim it's a claim of probable

cause indicating that the foundation

operated outside the bounds of its

approval that came from the IRS that's

our claim

you have two minutes yep

if we could read our investigative

process to you kind of in quick fashion

here's what we did we went to the nine

90s where financial investigators we

started with the returns that the

foundation filed not that we filed not

that you filed that they filed these

were their revenue sources in their

expenses we attempted to reconcile all

of those donations with expenses the

basis of our claim is we were unable to

do that on that note we followed the

money so we made extensive spreadsheets

of their revenues and expenses we

analyzed their income statements and we

did a macro review of all their donors

which it's a very bar bailed sort of

foundation less than 1/10 of 1% of the

donors gave 80% of the money so we

followed the money we further went and

looked at consent decrees that were

issued against the foundation by various

states we reviewed the responses from

all the states in which they operated to

specific questions about violations

consent decrees or penalties that they

may have paid to those states we did an

analysis of that the results are quite


in addition to that we sourced contracts

mo use and interaction with foreign

governments including email exchanges

between senior foundation executives

and government officials

additionally we did a review of all

their foreign offices and we drew a

spread map a spreadsheet comparing the

Clinton Foundation with the Global Fund

and PEPFAR the results were stark our

conclusions in the interest of time are

this foreign agent the foundation began

acting as an agent of foreign

governments early in its life and has

continued doing so throughout its

existence as such the foundation should

have registered on the fara ultimately

the foundation in its auditors

acknowledged this fact and conceded in

formal submissions that it did operate

as an agent therefore the foundation is

not entitled to 501c3 tax-exempt 'ln

privileges as outlined in IRS 170c two

misrepresentations the Clinton

Foundation did not comply with the

requirements of 501 C 3 and that it far

exceeded the purposes detailed in its

original Articles of Incorporation filed

December 23rd 1997 it subsequently

reaffirmed in numerous other records

across many jurisdictions including with

Nara the foundation did pursue programs

and activities for which it had neither

sought nor achieved permission to

undertake such was the case even before

the completion in transferal of the

presidential library in 2004 as such

representation representation by the

foundation to donors what was a

misrepresentation of the approval

organizational tax status allowing it to

raise funds for the presidential library

and related programs therein in these

pursuits the foundation failed the

organizational and operational tests 501

C 3 Internal Revenue Code 7.2 5.3

additionally the intentional misuse of

donated public funds the foundation

falsely attested that it received funds

and use them for charitable purposes

which was in fact not the case rather

the foundation pursued an array of

activities both domestically and abroad

some may be deemed philanthropic l biet

unimproved while others much larger in

scope are properly characterized as

profit oriented in taxable undertakings

of private enterprise again failing the

operational tests from philanthropy

philanthropy referenced above the

investigation clearly demonstrates that

the foundation was not a charitable


say but in point of fact was like was a

closely held family partnership as such

it was governed in a fashion in which it

sought in large measure to advance that

the personal interests of its principles

as detailed within the financial and

analysis of this submission and further

confirmed within the supporting

documentation and evidence section our

last finding donors responsibilities the

private foundations that donated to the

Clinton Foundation are themselves

subject to tax payments on the donations

that they made to the foundation under

Code IRC for 9 4 5 unless they meet

specific conditions as outlined in IRS

Code 727 19 582 completed thank you for

your time thank