Lugar Wants More Clinton Disclosure

Very little press coverage previewing the substance of Sen. Clinton's remarks today - lots of attention paid instead to disclosure issues.

 

In an otherwise convivial opening statement, Sen. Dick Lugar called on the Clinton Foundation to provide more than just transparency when it comes to new sources of donations.

 

"The only certain way to eliminate this risk going forward is for the Clinton Foundation to forswear new foreign contributions when Senator Clinton becomes Secretary of State," he said. He implied that the memorandum of understanding worked out between Clinton and the Obama transition was not sufficient.  

 

"I am hopeful that the Clinton Foundation and the Obama Administration will go further to ensure that the vital business of U.S. foreign policy upon which the security of our country rests, is not encumbered by perceptions arising from donations to the Foundation.   If there is the slightest doubt about the appearance that a donation might create, the Foundation should not take it.  If there are issues about how a donation should be disclosed, the issues should be resolved by disclosing the donation sooner and with as much specificity as possible." 

 

Lugar transmitted a four-point proposal: donations over $50,000 should be disclosed immediately, even if they're from domestic sources. The current agreement does not provide for the timely. disclosure of domestic donations.  

 

Further, Lugar wants foreign donations over $50,000 disclosed at the point the pledge is made and when the donations are received. Lugar is worried that the MoU has a big loophole: foreign donations from private entities aren't subject to State Department ethics review process; he wants all foreign donations, regardless of whether they come from government or private sources, to be subject to review.

 

SFRC chair Sen. John Kerry added:  "It's fair to say that Sen. Lugar is not speaking from a partisan perspective. He's speaking for the committee."

Lugar's disclosure principals follow the jump.

1.                  All donations of $50,000 or more in a given year from any source (foreign or domestic) should be disclosed immediately upon receipt, rather than waiting up to twelve months to list them in the annual disclosure.  Multiple gifts of less than $50,000 should be disclosed at the time they collectively exceed $50,000 in a given calendar year.

 

There is no appreciable administrative burden in having a staffer post these notable donations on the website at the time they are received.  According to the Clinton Foundation website, 499 donors have given $50,000 or more during the entire period since the Foundation's inception in 1997 - an average of less than one a week.  They could be posted as part of the normal routine of processing a large donation.  The transparency benefits of this simple step would be significant, and it would strengthen the Foundation's commitment to protecting the integrity of U.S. foreign policy activities.

 

2.                  Pledges from foreign entities to donate more than $50,000 in the future should be disclosed both at the time the pledge is made and when the donation eventually occurs.

 

This is likely to involve a very small number of cases, but it would mitigate the risk that large donors might seek to circumvent disclosure by promising donations in future years, including years beyond Senator Clinton's service at the State Department, when no disclosure would be required.

 

3.                  Gifts of $50,000 or more to the Clinton Foundation from any foreign source, including individuals, should be submitted to the State Department designated agency ethics official for the same ethics review that will be applied to donations from foreign governments and government controlled entities.

 

The MoU only commits the Foundation to submit gifts from foreign governments and government controlled entities for State Department ethics review.  In many foreign countries, the line between the government and private citizens is blurred.  Individuals with close connections to governments or governing families often act as surrogates for those governments.   Consequently, contributions from foreign governments or government controlled companies are not the only foreign contributions that could raise serious conflict of interest issues.  For example, conflicts of interest could arise from a donation from a Gazprom executive or a member of the Saudi Royal family as easily as from the governments of Russia and Saudi Arabia.  All large foreign donations should be vetted by the State Department to discover any connections between the giver and a foreign government or other potential conflicts of interest.

 

4.                  The annual disclosure requirement in the MoU does not specify the format of the disclosure.  The Foundation should clarify that it will annually disclose a distinct list of the donors and corresponding donation amounts (or the amounts within a dollar range) for that year.

 

It is important that each annual disclosure provides a distinct picture of donations for the previous year.  Other formats might not satisfy the spirit of the annual disclosure requirement.  For example, merely updating the original donor list released in December 2008 would not achieve transparency, because even a large donation might not push some previous donors into the next highest dollar range.  To illustrate, a past donor who has given $5 million and has been disclosed in the December 2008 disclosure within the $5 to $10 million range, could give almost $5 million more without altering where their name appears.