Wash. Post's Solomon -- whose "investigations" fuel right-wing attacks -- suggested Clinton nonprofit is somehow corrupt

In a February 27 front-page Washington Post article on Sen. Hillary Rodham Clinton's (D-NY) failure to disclose to the Senate her role as treasurer and secretary of the Clinton Family Foundation, staff writers John Solomon and Matthew Mosk omitted key information, which, combined with the article's length and prominent placement, resulted in the baseless suggestion that there is something untoward about the foundation and the Clintons' motivations in establishing it. As with Solomon's previous sloppy and misleading reports on Democrats' financial dealings, the Post article fueled numerous right-wing attacks on Sen. Clinton, including the distorted claim that she had been operating a "a secret foundation that has allowed her and her husband to avoid paying taxes on more than $5 million."

The 30-paragraph article, which ran above the fold and was illustrated with charts, marks the second time in less than a week that, as Media Matters for America has noted, the Post has given front-page play to a Solomon-Mosk report on the Clintons' finances. The article reported that Sen. Clinton did not list her position as treasurer and secretary of the Clinton Family Foundation "on annual Senate financial disclosure reports on five occasions," adding that "[t]he foundation has enabled the Clintons to write off more than $5 million from their taxable personal income since 2001, while dispensing $1.25 million in charitable contributions over that period."

Solomon and Mosk went on to report that, according to a retired Internal Revenue Service officer, many wealthy Americans use family-run foundations to "earn tax breaks," while engaging in "good works they can control":

The retired chief of the IRS branch that oversees tax-exempt nonprofits said family-run foundations are commonly created by wealthy Americans, allowing them to earn tax breaks by donating to a charity whose future good works they can control. Such charities need only to give 5 percent of proceeds each year to maintain a tax exemption.

"There are certain tax advantages to having your own foundations and not having the money as part of your estate," said Milton Cerny. "They can take the tax deduction up front, as soon as they put the money into the foundation."

The article did not explain the purported financial benefit to a funder of putting money in a foundation rather than keeping it.

After noting these "tax advantages," Solomon and Mosk proceeded to compare the Clinton Family Foundation to two other family foundations:

Private family foundations vary in amounts they give away each year. The Clintons have given away a quarter of their money. The family foundation of record producer David Geffen, by comparison, has been giving away most of what it takes in -- roughly $1 million a year -- leaving it with a balance of $400,000 at the end of 2005.

The Walton family, heirs to the Wal-Mart fortune, put $415 million in new money into its foundation in 2005. It gave $158 million to charitable causes, leaving the foundation with a $1.3 billion balance.

The article did not explain the relevance of the comparison to the Geffen or Walton foundations, but the comparison the authors draw is, in any event, flawed. Regarding the Clintons, the article cited the total amount they have donated to charity from the Clinton Family Foundation relative to the total amount they have contributed to the foundation. But in the case of the other two foundations, the article noted their annual figures, rather than their total donations relative to their contributions over the lifetime of the foundations.

Moreover, Solomon and Mosk ignored a more relevant comparison, based on the Post's own prior reporting -- Health and Human Services Secretary Mike Leavitt's family foundation. As reporter Jonathan Weisman noted in a February 27 Post online chat, Leavitt's family foundation, "in the first four years of its existence, never gave away 5 percent of its assets, as traditional foundations are required to do. Hillary's did." Weisman reported in a July 21, 2006, Post article that "Leavitt and his relatives have claimed millions of dollars in tax deductions" through a family foundation "that until recently paid out very little in actual charity." Weisman added, "Instead, much of the foundation's money has been invested or lent to the family's business interests and real estate holdings, or contributed to the Leavitt family genealogical society." According to Weisman, the Leavitt foundation "donated less than 1 percent of its assets in 2002, 2003 and 2004. The donations jumped to 6.3 percent of total assets last year [2005], after the sale of family water interests that also allowed the foundation to increase its lending to Leavitt business interests." While a spokesman for Leavitt termed the foundation's activities "totally legal and proper," Weisman quoted Rick Cohen, executive director of the National Committee for Responsive Philanthropy, as saying that "the Leavitts are using the foundation as a personal piggy bank, and that's not what the public -- or Congress -- ought to tolerate."

Including the Leavitt comparison would have made clear to Post readers -- as Solomon and Mosk did not do -- that the Clinton's charity is apparently entirely legitimate and above-board.

Additionally, while suggesting some sort of malfeasance on the Clintons' part, Solomon and Mosk left out the fact that the Clinton Family Foundation's tax forms, which have always been open to the public, indicate that the foundation spends very little on administrative costs. The American Institute of Philanthropy recommends that a charity's fundraising and general administration costs be less than 40 percent of total expenses. The Clinton Family Foundation's tax forms indicate the foundation has consistently spent about 1 percent or less of its total annual expenses and disbursements on operating and administrative expenses. (In the calendar year 2005, the foundation spent 0.5 percent of its total annual expenses and disbursements, or $2,758, on operating and administrative expenses; in 2004, 1 percent ($2,325); in 2003, 1 percent ($3,265); and in 2002, 0.07 percent ($125).) The Washington Post provides links to the tax forms on its website.

Responding to the February 27 Post article, Paul McLeary of the Columbia Journalism Review wrote, "Is there more to the story? Have the Clinton's [sic] been hiding money? Making shady deals or investments and keeping it from the Senate? Not quite."

Such complaints commonly follow Solomon's reporting on Democrats' financial dealings. As Media Matters previously noted, Solomon has baselessly linked current Democratic fundraising efforts to the scandal surrounding former Republican lobbyist Jack Abramoff, has baselessly suggested former Sen. John Edwards (D-NC) was engaged in a shady land deal, and has written seriously flawed articles suggesting unethical behavior by Senate Democratic Leader Harry Reid.

Furthermore, as Media Matters documented, Solomon's vague and misleading reporting has a history of fueling right-wing attacks, and, following this trend, Solomon and Mosk's reporting on the Clintons' foundation was quickly used by conservatives to misleadingly portray the Clintons as corrupt.

In a February 27 posting headlined "Secret Clinton Foundation Exposed," Corruption Chronicles, a weblog operated by the conservative legal group Judicial Watch -- best known for the numerous lawsuits it filed against the Clinton administration -- claimed, "In violation of Congressional ethics laws, Hillary Clinton has for years operated a secret foundation that has allowed her and her husband to avoid paying taxes on more than $5 million." In fact, the foundation is not "secret." As reported by The New York Times in a February 28 article, "Details about the foundation have been on an Internal Revenue Service Web site for years." Solomon and Mosk also noted in their article, "The foundation's tax filings are available on an Internet repository for IRS documents."

Additionally, the Corruption Chronicles post called into question the legitimacy of the charities to which the Clintons donated, writing the charity made "so-called charitable contributions to a variety of questionable recipients, including Middle Eastern heads of state." However, Judicial Watch omitted information from Solomon and Mosk's original article that identified three charities in honor of King Hussein, Yitzhak Rabin, and Shimon Peres. From the Washington Post:

At least three beneficiaries were from the Middle East, where the former president worked to forge an elusive peace agreement during the 1990s. They include $50,000 to the King Hussein Foundation, named in honor of the late Jordanian king, who was a key player in Clinton peace talks; $50,000 to American Friends of Yitzhak Rabin, honoring the assassinated Israeli prime minister; and the American Friends of Peres Center, honoring former Israeli prime minister Shimon Peres.

The Corruption Chronicles post also falsely claimed that the foundation gave money to "a shady Arkansas friend who helped Hillary turn a $1,000 investment into $100,000 with fraudulent commodities trades in 1978." While the foundation did make contributions to two foundations in the name of Diane Blair, described by Solomon and Mosk as "the late wife of James Blair, the businessman who helped Hillary Clinton with controversial commodities trades in the late 1970s that netted her about $100,000," Clinton was not involved in "fraudulent commodities trades." Solomon and Mosk also noted, "The Clintons' tax form indicates the money went to the private charity [in Diane Blair's name], but James Blair said in an interview yesterday that the Clintons 'miscoded' the entry. The check actually went to the university [of Arkansas] fund [for the Diane D. Blair Center of Southern Politics and Society], he said."

On the February 27 edition of his radio show, Rush Limbaugh joined Judicial Watch in further distorting Solomon and Mosk's article, and appeared to suggest the Clintons would use the foundation for improper financial purposes. In fact, as Media Matters noted earlier, the foundation's records are available to the public and its activities are totally transparent. From Limbaugh's show:

LIMBAUGH: This is an interesting story, too, from The Washington Post's John Solomon and Matthew Mosk writing: "Sen. Hillary Rodham Clinton and former president Bill Clinton have operated a family charity since 2001, but she failed to list it on annual Senate financial disclosure reports on five occasions. The Ethics in Government Act requires members of Congress to disclose positions they hold with any outside entity, including nonprofit foundations. Hillary Clinton has served her family foundation as treasurer and secretary since it was established in December 2001, but none of her ethics reports since then have disclosed that fact. The foundation has enabled the Clintons to write off more than $5 million from their taxable personal income since 2001, while dispensing $1.25 million in charitable contributions over that period. Clinton's spokesman said her failure to report the existence of the family foundation and the senator's position as an officer was an oversight." Yes, her mind was Jell-O, Jell-O, Jell-O. "Her office immediately amended her Senate ethics reports to add that information late yesterday after receiving inquiries from The Washington Post."

You know, the one thing we don't know about these people -- $40 million Clinton has earned, largely foreign sources, making speeches -- we don't know how much money has gone to the Clinton Library and Massage Parlor, and we don't know how much of the money that goes to the Clinton Library and Massage Parlor might find its way back into the back pockets or the bank accounts of the Clintons.

Had Solomon and Mosk included in their article the most basic information about the Clintons' charity -- the very small amount of money it spends on administrative expenses -- they would have undermined and maybe pre-empted Limbaugh's baseless suggestion that the Clintons use the charity as a personal slush fund.

The February 27 edition of MSNBC's Tucker featured on-screen text asking, "Hillary caught in tax scheme?" during a discussion of the Clinton Family Foundation. From the February 27 edition of MSNBC's Tucker:

TUCKER CARLSON (host): Mike, you saw the piece today in The Washington Post, that Hillary Clinton apparently has not disclosed -- and she's not alone in this -- her charitable contributions. I was struck by not simply the fact that she didn't disclose it -- I don't think it's such a big deal -- but by how relatively little the Clintons gave to charity relative to how much they make, and by how much in tax deductions -- she apparently is taking $5 million in tax deductions over the past several years, while only giving from this foundation $1.4 million. That doesn't strike -- for people who want to redistribute the wealth, that doesn't strike me as particularly generous.

MIKE BARNICLE (MSNBC contributor): Well, no, I mean, that stood out with me too, the fact that it was basically, you know, a good vehicle for $5 million in tax savings. I don't think that's her problem, Tucker. If you go to Iowa or New Hampshire to see the early action, she's a very smart, very poised woman. She is speaking from a focus group.

You go see Barack Obama, he's selling the future. He's real to a lot of people. People lean forward, lean forward to hear Barack Obama. They stand back and listen to Mrs. Clinton. He's selling the future. She is the past, and I'm not sure that it is going to be as easy for her as a lot of people think.

The story was even picked up in Australia by the News Corp.-owned Melbourne Herald Sun in a February 28 article headlined "Hillary Clinton caught on charity tax scheme."