Clinton Foundation Auditor Sanctioned – Numerous Material Issues Including the Clinton Foundation and Its Auditor Ignoring $483 Million Error
Arkansas Sanctions Clinton Foundation’s Auditor in Landmark Case
The Clinton Foundation is America’s largest unprosecuted racketeering and charity fraud case. Investigations of the Clinton Foundation, shelved by the corrupt and partisan DOJ, FBI, and IRS leadership, demonstrate a two-tier justice system with exemptions for the political elite.
The only remaining pathway for due process was petitioning the Arkansas State Board of Public Accountancy to enforce AICPA professional standards against the Foundation’s former national audit firm BKD, LLP (BKD has since merged with another national firm forming Forvis, LLP).
BKD issued slapdash audits and tax returns (under penalties of perjury) for 13 years. By dismissing AICPA professional standards and IRS compliance, the firm created a veneer of legitimacy for the Clinton Foundation. BKD’s main fiduciary obligation is to serve and protect public interest, not the Clinton Foundation.
I filed a complaint with the Arkansas Board against BKD, LLP. The complaint (59 allegations), relying on public documents, charged BKD with professional misconduct and failure to comply with the following AICPA standards and the IRS Code. The complaint’s primary focus is the Clinton Foundation’s 2011 amended IRS Form 990 tax return dated November 16, 2015, and the underlying 2011 audited financial statements.
The firm filed a condescending and indefensible response dismissing the allegations and smearing me as a “conspiracy theorist.” The reply crossed a bright-line including a veiled threat of AICPA disciplinary action against me. BKD’s Chief Operating Officer Eric Hansen served at the time as the AICPA Chairman.
Rampant Irregularities
The complaint covered substantial irregularities and documented a culture of deceit, with the more flagrant irregularities abstracted below.
Trustee Oversight & Control Failures
The Foundation’s Board of Trustees engaged Simpson Thacher & Bartlett, LLP, to review its “decadal” (Or is it decadent?) governance. Their report was issued in late December 2011. WikiLeaks released the draft document widely covered in media outlets. The governance review found severe organizational and internal control weaknesses jeopardizing the Foundation’s tax-exempt status. Why did BKD ignore the flashing warning signals?
Material Errors and Omissions in 990 Tax Returns
Hillary Clinton’s 2016 Presidential run caused the Foundation to evaluate, amend, and refile its tax filings for 2010, 2011, 2012, and 2013 on November 16, 2015. The justification was to disclose foreign government grants and the Clintons’ paid speeches on behalf of the Foundation because the few lines on the returns were previously left blank. Foundation President Dr. Donna Shalala’s issued a logic-defying press release that the Foundation exceeded all legal tax requirements and “that the errors did not require us to amend our returns.” The accounting fees for 2015 were a staggering $2.7 million suggest otherwise.
I compared the original returns line-by-line to the amended returns. The reconciliations found extensive and material revisions of over 200 items each year. Substantial changes occurred in the reporting categories in the Balance Sheet, Statement of Functional Expenses, and Revenue Statement. These changes required the Foundation to reissue the consolidated financial statements or compulsory for BKD to rescind its audit opinions; however, neither happened. The Foundation routinely restated its financial statements; for instance, the reissuance of 2010 due to offsetting marginal errors of just 2.2% of revenue and expense.
“Attorneys and accountants should be the pillars of our system of taxation, not the architects of its circumvention” – Former IRS Commissioner Mark Everson
Marked Up CF 2011 990 Tax R… by Jim Hoft
BKD Prepared and Audited Foundation’s Financial Statements
The Foundation’s Management Representation Letter included a disclosure that BKD prepared the financial statements. BDK violated independence, integrity, and objectivity ethical standards by compiling and auditing the Foundation’s financial statements.
Massive Accounting Errors
The Foundation’s agreement with the World Health Organization’s Unitaid was to purchase reduced-priced medicines as an agent. The Foundation’s Clinton Health Access Initiative (CHAI) subsidiary negotiated for reduced-priced drugs with Unitaid advancing funds to CHAI to pay for the purchases shipped overseas by pharmaceutical companies.
Accounting principles required the funds to be held in an escrow account; however, CHAI booked the Unitaid advances as charity revenue and payments as program expenses. CHAI replaced BKD in 2012 with Meyers Hoffman McCann P.C.. Meyers firm corrected the flagrant accounting error for 2011 by restating CHAI’s financial statements and tax return. BKD ignored the restatement when it compiled and audited the 2011 and 2012 consolidated financial statements.
The accounting error from 2006 through 2011 totaled a whopping $483 million overstatement of revenue and expense. The Foundation and BKD never disclosed the monumental blunder, which grossly overstated its consolidated charitable activities and possibly concealed the diversion of funds.
CHAI Restatement for Accounting Error by Jim Hoft on Scribd
Gross Overstatement of Library’s Construction Cost
The reported historical construction cost of the Clinton Library is $171.3 million or $1,332 per gross square foot. The Library cost is scandalously high when compared to equivalent high-quality Little Rock commercial buildings. The Heifer International and Arkansas Study Institute construction cost per gross square foot is $198 and $238, respectively, a flashing warning sign of possible construction fraud.
Failure to Audit Clinton Global Initiative
