Bloomberg News

Dow Companies Invest in Clinton -- With One Holdout

May 06, 2014

Hillary Clinton

Hillary Rodham Clinton speaks after receiving the Order of Lincoln Award at the Field Museum in Chicago, Saturday, May 3, 2014. Photograph: Paul Beaty via AP Photo

The blue-chip political investment for big business is Clinton Inc.

Twenty-nine of the 30 Dow Jones (INDU) Industrial Average index companies have given money or in-kind support to projects branded by Bill, Hillary and Chelsea Clinton, according to a review of Clinton Foundation and U.S. State Department reports.

The main gates to Clintonworld are the Clinton Foundation, an umbrella group overseeing the former president’s causes such as raising money to help earthquake-ravaged Haiti, and its spinoff Clinton Global Initiative, which recruits corporate sponsors for international charitable projects. Major corporations also responded to a call for cash from the State Department during Hillary Clinton’s tenure.

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Twenty-five of the Dow’s 30 corporations have contributed directly to the Clinton charities; 27 announced philanthropic projects through the Global Initiative; and 16 helped underwrite a $60 million U.S. pavilion at the 2010 Shanghai Expo.

The companies listed on the Dow Jones Industrial Average, which are leaders in their industries, collectively spent $193 million last year lobbying the federal government and the U.S. Congress, according to the Washington-based Center for Responsive Politics. Issues they advocated on varied from tax breaks to clean water regulations to curbing government surveillance and data-collection programs.

As Hillary Clinton considers a 2016 presidential bid, the symbiotic relationship between her family and corporate givers has shareholders, consumer advocates and ethics watchdogs wary about conflicts of interest.

Raise Suspicions

“It is always going to raise suspicions,” said David Almasi, the executive director for the Republican-leaning National Center for Public Policy Research who also owns shares of Boeing Co., a Dow member that has donated to the Clinton Foundation and has business interests across the globe. “It’s the appearance of impropriety that is the problem. If they are going to play like this, they are going to have to accept that we are going to be skeptical.”

Bob Hormats, who worked under Clinton at the State Department, defended his former boss. She saw the benefits that could accrue to both American businesses and U.S. foreign policy goals when the State Department worked with the private sector, he said.

In Myanmar, for example, the promise of U.S. investment was one inducement offered in an effort to get the government to move toward a democracy. The eventual rollback of American sanctions opened a new market for corporations, and the Coca-Cola Co. has promised to invest $200 million in the country formerly known as Burma.

Economic Statecraft

“What she did in economic statecraft and international economic policy is really the nexus between foreign policy and the strength of the national economy, and particularly job creation,” said Hormats, a onetime Goldman Sachs (GS:US) executive who served as undersecretary for economic growth, energy and environment. “A lot of jobs were supported by this effort.”

The ties between the Clintons and big business have had a long time to form. A Clinton held federal office -- the presidency, a U.S. Senate seat, or the top State Department job -- for 20 years, a streak that ended last year.

When the multiple routes to the Clintons are combined, all but one of the 30 companies that comprise the Dow Jones index -- or their nonprofit arms -- have written checks for Clinton enterprises since Bill Clinton started the New York-based foundation in 2001.

Lone Holdout

The lone holdout: UnitedHealth Group Inc. (UNH:US) The Minnetonka, Minnesota-based company’s political action group splits its funds between parties, giving 45 percent to Democrats and 56 percent to Republicans so far in this election cycle, according to the Center for Responsive Politics, which tracks campaign spending. UnitedHealth spokesman Tyler Mason didn’t reply to e-mails or phone messages seeking comment.

Federal law bans companies from making donations to candidates. The once and possibly future first family’s political and philanthropic network offers the private sector access points in the form of charitable projects that polish brands on both sides of the transaction.

After she was sworn into office in 2009, Chinese officials complained to Hillary Clinton that the U.S. wasn’t planning to build a pavilion at the Shanghai Expo, the modern equivalent of the world’s fair.

She assigned three allies, Jose Villarreal, Elizabeth Bagley and Kris Balderston, to raise money from corporations and foundations. Procter & Gamble Co. (PG:US), maker of toothpaste, diapers and laundry detergent, donated $3 million to the pavilion fund. It also has given $3.9 million to the Global Initiative.

Lobbying State

At the time, the company was lobbying the State Department on more than two-dozen issues, including trade deals, China policy, and e-commerce, lobbying-disclosure reports show.

On Jan. 8, 2012, Hillary Clinton lavished praise on P&G for its philanthropic programs in Nigeria and Pakistan during a State Department ceremony.

“Our second honoree is a real household name, Procter & Gamble,” she said. “You know them for their great products that Americans use every day, but you may not be aware of their tremendous contributions that are helping to save and improve lives around the world.”

Tim Miller, executive director of America Rising PAC, a group based in Arlington, Virginia, that conducts opposition research on Democratic candidates, said the Clintons “have a long track record of trading access for power” and have done so both in office and out.

New Scale

“This decade they have institutionalized it, blending their foundations, consulting firms, speeches, and public-private partnerships to use their position and influence to help their friends and benefactors,” Miller said. “A third Clinton administration would practice cronyism on a scale not seen in decades.”

Paul Fox, a P&G spokesman, said the company pays to attend and sponsor Clinton-organized conferences “because it allowed us to make connections with hundreds of partners to enable the acceleration of our corporate social responsibility programs.”

Bloomberg LP, which is closely held, has given $50,000 to $100,000 to the Clinton Foundation, and Bloomberg Philanthropies has given between $100,000 and $250,000, according to Clinton Foundation records. The Global Initiative’s website lists Bloomberg LP or Bloomberg Philanthropies as partners on 10 projects.

Bloomberg LP, the parent of Bloomberg News, was one of 63 organizations -- most of which aren’t listed on the Dow -- that cosponsored the U.S. pavilion.

Doing Good

Clinton allies said the former president, the former secretary of state and their daughter have created a model in which their “power to convene” influential players in government, commerce and philanthropy can be used to help society, and all participants, “do well by doing good.”

“CGI provides networking opportunities based on members’ interest areas,” said Bob Harrison, the chief executive officer of the Global Initiative. “We bring together the people who are inclined to do something in a particular area to meet people they wouldn’t otherwise meet.”

Still, the relationships provide donors with a path to influence that most don’t have, good-government advocates say.

“Even the donors who are writing $10,000 checks are going to get a level of attention to their concerns from Bill Clinton, and he is someone who is married to -- potentially -- the next president of the United States,” said Bill Allison, editorial director of the Washington-based Sunlight Foundation.

Silent Motivations

Craig Minassian, a spokesman for the Clinton Foundation, said the donors give because they want to support charitable work in the U.S. and abroad.

“The only result of their support is helping improve the lives of people all over the world in demonstrably efficient and effective ways and we’re grateful,” he said in an e-mail.

Other former presidents and aspirants have started foundations that attract corporate gifts -- just not in the same volume. And none of them were married to a potential candidate.

The Carter Center, founded by former Democratic President Jimmy Carter, boasts partnerships with eight of the 30 Dow Jones listed companies or their foundations, according to its website.

Jeb Bush, the former Republican governor of Florida who is considering a White House bid in 2016, is chairman of the Foundation for Excellence in Education, a Tallahassee-based nonprofit that supports charter schools and education reform. It lists three foundations associated with Dow 30 companies on its website: The Walton Family Foundation, GE Foundation and the Bill & Melinda Gates Foundation. No company is listed as giving directly.

Separate Entity

The Clinton Foundation, like all 501(c)(3) nonprofits, isn’t required to disclose donors. It started doing so as a condition of President Barack Obama’s offer of the nation’s top diplomatic post to Hillary Clinton.

Under the terms, the Clinton Foundation also agreed to include the Global Initiative as a separate entity, in an effort to ensure that contributions from foreign sources didn’t create an appearance of a conflict of interest with Hillary Clinton’s work.

The Global Initiative, which has since been reabsorbed into the foundation, collects money in the form of direct contributions, corporate sponsorship of conferences, and membership dues. Its backers are listed as contributors to the Clinton Foundation, and leftover sums are given back to the parent nonprofit.

IRS Filings

Even when the Global Initiative separated from the Clinton Foundation, millions of dollars flowed between the two entities. In Internal Revenue Service filings, the nonprofits reported that the Clinton Foundation gave $14.9 million to the Clinton Global Initiative in 2010, and CGI gave its parent foundation a total of $19.2 million in 2011 and 2012.

Almasi, from the National Center for Public Policy Research, challenged Boeing CEO W. James McNerney to defend the company’s contributions to the Clinton Foundation during the airplane-maker’s annual shareholders’ meeting last week.

The Washington Post reported on April 13 that Boeing announced a $900,000 donation to the Clinton Foundation two months after the company won a contract from the Russian government that Hillary Clinton had advocated for at the State Department. The story also noted that Clinton had won $2 million in contributions from Boeing for the Shanghai Expo.

Boeing Donations

Boeing has given between $1 million and $5 million to the Clinton Foundation, according to disclosure reports that record contributions in broad ranges.

“By donating to the Clinton Foundation within months of receiving a huge favor from the secretary of state, did we not expose both our company and the secretary of state to the risk of being charged with honest services fraud?” Almasi asked McNerney. “Why would we risk federal charges by making a donation to the Clinton Foundation at a time when our company had such a clear conflict of interest? It seems reckless and unnecessary, even if it was not illegal.”

McNerney responded that Clinton would have supported the Russian contract regardless of the company’s charitable donations. Under federal law, the Commerce Department vets companies seeking advocacy from government officials, including the secretary of state, for foreign contracts.

Aligned Interests

Boeing spokesman Sean McCormack said the firm’s giving “is aligned with our interests and those of regions and communities where we do business, and is carefully vetted to ensure that it is appropriate and compliant with law.”

The Clinton appeal crosses party lines. Cisco Systems Inc., the world’s largest maker of networking equipment, donated between $1 million and $5 million to the family foundation even though the company’s CEO, John Chambers, raised money for Republican presidential candidates Mitt Romney in 2012 and John McCain in 2008.

Cisco spokesman John Earnhardt said the company pays and participates in Global Initiative conferences because the events are a chance to be with “a group of like-minded companies, NGOs and government leaders who are all looking to make a positive impact in the world.”

In her final days as secretary of state, Hillary Clinton announced the Alliance for Affordable Internet -- a partnership developed in her office aimed at providing online access in developing countries. “We’re going to help the next billion people come online,” she said in January.

Consumer advocate Ralph Nader said giving to decision-makers’ charities is a modern twist on an old tale.

“This is the new theme. It isn’t just PACs, it is giving to foundations with the politician’s name on it,” he said. “You’ve got to call these companies. You’ve got to meet with them. Socialize with them. You become more dependent on them. You become more obligated. It is a terrible web of influence that operates in nonprofit areas.”

To contact the reporters on this story: Jonathan Allen in Washington at jallen149@bloomberg.net; Annie Linskey in Washington at alinskey@bloomberg.net

To contact the editors responsible for this story: Jeanne Cummings at jcummings21@bloomberg.net Mark McQuillan


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  • GS
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  • UNH
    (UnitedHealth Group Inc)
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