General Ramblings: Donors With Access

May 1, 2008       Paul Clolery      

There was always one kid in class who ruined things for everyone else. That was true starting with kindergarten and running through college. In kindergarten, it was the kid who blew bubbles when gum was grudgingly permitted by the teacher with the caveat that there be no bubbles or snapping. During college, students in a literature class were given the choice of either a final paper or an exam. The decision had to be unanimous. One person opted for the exam, for which she didn’t show up.

Bill and Hillary Clinton were probably those kids in their respective classes, always pushing the envelope to the eventual detriment of their classmates. Whether it’s an Arkansas land deal, a questionable investment in the futures markets or now donations to a presidential library, the Clintons have always found a way to contort the rules to their advantage. What’s going on with donations to the William J. Clinton Presidential Library, while his wife is in the U.S. Senate and is running for president, endangers the overall charitable sector. Large donations from mysterious sources will at least start the discussion of regulation changes with regard to large gifts to political organizations tied to an individual elected official.

The current rules are pretty clear when it comes to politics, donors and the nonprofit sector. Donors of $5,000 or more must be listed on Schedule B of the federal Form 990. That part of the form is not a public document. But, flip through the annual report of almost any organizations and the names of donors are there for the world to see. Of course, there are always a few “anonymous” donors in the annual reports.

Politicians have always had civic organizations to which “friends” could contribute. That money generally is in the less than $5,000 category and thus excluded from being listed. It is amazing though, how little it can take to get someone’s attention. When the mayor of Bridgeport, Conn., was indicted for corruption, one of the counts was the acceptance of just $4,450 in kitchen appliances.

Surely the Clintons don’t need that handy little Magic Bullet for the kitchen in their Chappaqua, N.Y. home. But you have to wonder why huge donors to Bill Clinton’s presidential library don’t want to be identified. Bill and Hill also reported more than $100 million in income since he left office and she went to the U.S. Senate. Presidents make a fortune on the speaking tour after they leave office but nobody has raked it in like Bill Clinton, the guy with a wife in the Senate. There was shock when former President Ronald Reagan accepted $1 million to speak in Asia. That’s chump change for Bill.  And, President Reagan wasn’t peddling influence with a nudge and a wink.

Long gone are the days of Billy Beer, when a presidential family member, in that case Billy Carter, has to back away from nickel and dime endorsements.

To suggest that Bill has no influence with his wife is ridiculous, given she is running nearly conjoined to him. It’s safe to say Billy (Carter not Clinton) had little say in Jimmy’s administration.  Though, history does repeat. It only took 20 years for a presidential candidate to have to get some distance from a self-promoting family member named Billy.

Peddling influence happens all the time under the cloak of tax-exempt organizations. An outside observer can easily see the conflicts of interest. No politician — former presidents nor former dog catchers — should be able to market their access to elected officials under the cloak of a tax-exempt organization. The Internal Revenue Service needs to promulgate new rules, expanding on the prohibition regarding electioneering. The nonprofit sector doesn’t need another round of beers.  NPT