By John Helmer, Moscow
Bill Clinton and Hillary Clinton, the former and wannabe presidents of the US, say they have accepted more than $13 million from Ukrainian pipemaker Victor Pinchuk since 2006. But Pinchuk says he’s given the Clinton Foundation only $7.6 million.
It won’t help to employ accountants to ask where the missing $5.4 million was originally trousered, if not the Pinchuk Foundation, then which branch of Pinchuk’s business. That’s because the Clinton Foundation’s auditors – an Arkansas firm called BKD – have turned up this much money in revenues, and also in expenditures, which the Foundation’s annual report inexplicably fails to report and regularly understates. The Pinchuk Foundation also refuses to answer questions about discrepancies in its annual accounts, whose auditors are reported by Pinchuk’s organization to be Ernst & Young. Their signature is reproduced in the Pinchuk Foundation annual reports, although no copy of their financial reports and notes has been published.
The question of the missing money is a criminal case in Moscow for Russian prosecutors. This is because they are investigating how and where Pinchuk trousered the sum of Rb6.5 billion ($186 million) from his Russian auto insurance company, Rossiya Insurance Open Shareholding Company. The insurer’s licence was cancelled  last October 23 by the Russian Central Bank’s insurance inspectorate. At the time, the liabilities of Rossiya were reported to be Rb2.3 billion ($72 million). Over the previous twelve months, Rossiya had defaulted on Rb4.5 billion ($141 million) in claims .
In the Moscow Arbitrazh Court hearing  on Rossiya last month, the bankruptcy trustee Yevgeny Zhelnin charged that Pinchuk (left) had been using fraudulent reinsurance and other schemes to empty Rossiya’s treasury of its income from premiums, along with its reserves for payment of claims . The allegation against Rossiya and its proprietor is fraud on a grand scale. And that’s where the problem starts for Hillary Clinton (right), her husband, and daughter: have they been on the receiving end of a money-laundering operation in which the proceeds from Rossiya became the income of Pinchuk’s foundation, and were then spent on the Clinton Foundation?
Pinchuk first acquired a 25% blocking stake in Rossiya through his EastOne holding company in 2007. In 2009 he bought another 25% plus one share to become the controlling shareholder, and by the end of that year, he had taken 100% of Rossiya.
In a single-page summary of its annual balance sheets, purportedly endorsed by Ernst & Young, the Pinchuk Foundation reveals that 2007 was a bonanza year. The money box started with a cash balance of just $63,947. It then filled up with what Ernst & Young calls “contributions and charitable donations” totaling $15.7 million. The Foundation refuses to clarify the source of its donations.
The balance-sheet claims the foundation spent $1.1 million on Pinchuk’s lobbying group for Ukrainian membership of the European Union, called Yalta European Strategy. Another half a million dollars went to a Washington, DC, lobbyist called Anders Aslund at the Peterson Institute for International Economics, and another $250,000 to the Brookings Institution, also a Washington think-tank lobbying for Pinchuk’s causes in the Ukraine.
The Clintons claim to have collected $132.5 million in 2007, but they won’t say how much was from Pinchuk. Pinchuk won’t say if he gave them a penny that year. Pinchuk’s accountants don’t start revealing their spending on the Clintons until 2009, when the Pinchuk organization reports that $4 million was despatched and received. In the meantime, the motor and third-party liability insurance premiums rolled into Rossiya in Moscow – and the philanthropy was booming at the Pinchuk Foundation in Kiev. According to Ernst & Young, Pinchuk’s donations in 2008 jumped 68% to $26.3 million.
In 2009, as EastOne took over Rossiya entirely, the Russian economy was in trade-induced recession, car sales dropped, along with premium revenues at Rossiya . Pinchuk’s generosity dropped to $13.8 million, according to the foundation balance-sheet. Aslund’s stipend was cut by half to $100,000 for the year.
Annus horribilis it might have been for philanthropy, but Pinchuk’s foundation paid itself $1.5 million in “administrative expenses” in 2009 – up from $1.4 million in 2008, and four times the $307,265 which running the show cost in 2007. Bill Clinton was paid  to speak in January 2009 at what Pinchuk called his Davos Philanthropic Roundtable.
In 2010, Pinchuk said he gave $1.1 million to the Clinton foundation; Clinton claims the amount was between $5 million and $10 million. In 2012, the Pinchuk Foundation says it gave $1 million; according  to the Clinton Foundation that year the amount donated was between $5 and $10 million.
The Clinton Foundation’s problems of accounting for its money are legion. Although it has been taking in about a quarter of a billion dollars per annum, it overspent its income in 2007 by $11.1 million; in 2008 the overspend was $13.8 million. In 2013 BBB, the American philanthropy watchdog, warned  public donors that the Clinton operation failed to meet the required standard for public accountability and independent supervision; make that avoidance of conflict of interest, since most of the foundation’s staff have also been involved in the presidential campaigning of Mrs Clinton.
The foundation claims to operate a New York City headquarters at 1271 Avenue of the Americas, according to the website; 55 West 125th Street, according to the telephone answering machine. Its press department is headed by Valerie Alexander, who ran the press operation for Mrs Clinton’s abortive presidential campaign in 2007; the organization identifies her deputy as Betsy Feuerstein. Neither answers the telephone; both refuse to answer email requests for clarification of the $13 million in receipts from Pinchuk. On February 12, a New York newspaper claimed  the total was “roughly $13.1 million”, but failed to cite a source. The reporter, who did not check Pinchuk’s financial reports and court claim records, refused to answer questions. The newspaper reported a statement in support of Pinchuk by Aslund and the Peterson Institute without identification of more than a million dollars Pinchuk has paid the two of them.
A cryptic note in the Pinchuk Foundation report for 2010 concedes that from “2009; all funding [for Clinton] was transferred through the accounts of the Foundation.” Open this link  and go to page 61. That implies there was an agreement between Pinchuk and the Clintons, their foundations, and their lawyers that whatever conduit he had been using to pay them should appear from then on to be a channel between the two charities.
Pinchuk with Chelsea Clinton,
Vice-Chair of Clinton Board
But the Pinchuk report goes on: “Such additional funding is not transferred through the accounts of the Foundation, but is provided directly by the donors to the legal entities implementing the projects. Accordingly, such transfers are not included in the combined statement of cash receipts and disbursements.”
This note becomes evidence for answering the question of the missing $5.4 million. But that question leads to bigger ones – what has Pinchuk been concealing of the origin of cash he has been giving the Clintons; what Pinchuk entities have been direct donors to Clinton entities off the foundation balance-sheets; and what have the Clintons suspected, or known, which led them to the charitable fix between the two foundations.
There’s more – and it’s now up the Investigative Committee, the criminal prosecution branch of the Russian procuracy, to determine who is liable for the fraud, money laundering, and conspiracy in the case of Rossiya Insurance Company, and where the money went. That last question ought to be of interest to US prosecutors if they can get the Clintons to explain as much as they know – or ought to have known — about their receipts from Pinchuk.