POLITICS
08/28/2016 01:13 pm ET Updated Aug 29, 2016

Here's How The AP Should Have Written Its Hillary Clinton Article

Money is just one form of currency in the Clintons' elite circles.
Hillary Clinton's campaign is pushing back against an Associated Press story earlier this week about Clinton Founda
Bloomberg/Getty Images
Hillary Clinton's campaign is pushing back against an Associated Press story earlier this week about Clinton Foundation donors' access to the State Department during her tenure.

On Tuesday, The Associated Press published a sweeping new investigation into the mingling of Clinton Foundation donors and official State Department business. It has since come under fire for conceptual and structural flaws. By limiting its investigation of the Clinton Foundation to specific financial contributions that led to direct and specific benefits for donors, The Associated Press left itself vulnerable to criticism that no verifiable “quid pro quo” could be established from its findings. By trying to cram its findings into a small box, it distorted what it found, and missed the bigger picture. If the AP had conceived of the donations as just one of many exchanges of money, prestige and reciprocal back-patting that bind global elites, its case against the Clintons would be considerably stronger. So, with that vision in mind, we’ve done a write-through of the AP’s story ― a heavy edit that relies in many places on their words and reporting, but casts the article in a broader light. The parts in bold come directly from the AP. The rest are our additions. You’re welcome, AP.

WASHINGTON ― At least 101* people who met or had phone conversations scheduled with Hillary Clinton while she led the State Department donated to her family charity or pledged commitments to its international programs, according to a review of State Department calendars released so far to The Associated Press.

Combined, the 101 donors contributed as much as $326 million. At least 40 donated more than $100,000 each, and at least 20 gave more than $1 million.

Among those granted time with Clinton included an internationally known economist who asked for her help as the Bangladesh government pressured him to resign from a nonprofit bank he ran; a Wall Street executive who sought Clinton’s help with a visa problem; and representatives of Gulf state governments working to undermine negotiations with Iran over its nuclear program.

Her calendars and emails released as recently as this week describe scores of contacts she and her top aides had with foundation donors.

The AP’s findings represent the first systematic effort to calculate the scope of the intersecting interests of Clinton Foundation donors and people who met personally with Clinton or spoke to her by phone about their needs.

Some of Clinton’s most influential visitors donated millions to the Clinton Foundation and to her and her husband’s political coffers. They are among scores of Clinton visitors and phone contacts in her official calendar turned over by the State Department to AP last year and in more-detailed planning schedules that so far have covered about half of her four-year tenure. The AP sought Clinton’s calendar and schedules three years ago, but delays led the AP to sue the State Department last year in federal court for those materials and other records.

The case of Muhammad Yunus, a Bangladeshi economist who won the 2006 Nobel Peace Prize for pioneering low-interest “microcredit” for poor business owners, may be among the most instructive. Although critics such as GOP presidential candidate Donald Trump charge that the frequency of the overlaps shows the intermingling of access and donations, fueling perceptions that giving the foundation money was a price of admission for face time with Clinton, the reality is that the overlap is a function of a worldwide capitalistic system in which oligarchs, corporate CEOs and celebrity heads of state mingle to form a global elite that dictates a global agenda. This can sometimes take the form of quid pro quos, but it is more often a subtle form of exchange, in which exclusion from or inclusion within an elite club depends as much on whom you know as the size of the check you can write.

The use of the Clintons in this way, and their willingness to be used, is ‘crony capitalism’ in a very clear form. James Galbraith, University of Texas

The Clintons did not create this system, but they have become central players within it. It is a cozy world inhabited by a select coterie of political, business and media elites, where tomorrow’s news is often the product of a not-so-serendipitous conversation between a TV pundit and a corporate CEO who were introduced by a foreign minister they both know. In addition to “talking shop” ― exchanging the tips of their respective trades ― they speak about solutions to social ills they rarely encounter directly, typically entertaining ideas within a narrow spectrum of proposals that do not threaten their world view.

So many such encounters occur at the annual World Economic Forum in Davos, Switzerland ― more commonly known as “Davos” ― that the gathering has become a descriptor for a certain breed of cosmopolitan, international elite: the Davos set.

Hillary and Bill Clinton are stars of the Davos set; so is Muhammad Yunus.

[Yunus] met with Clinton three times and talked with her by phone during a period when Bangladeshi government authorities investigated his oversight of a nonprofit bank and ultimately pressured him to resign from the bank’s board. Throughout the process, he pleaded for help in messages routed to Clinton, and she ordered aides to find ways to assist him.

“The use of the Clintons in this way, and their willingness to be used, is ‘crony capitalism’ in a very clear form,” said University of Texas economist James Galbraith. “It’s a matter of forming your views of merit on the basis of what wealthy people and their acolytes advise you, and on the basis of personal connections made over the years. Connections that are not made with people who are not wealthy.”

American affiliates of [Yunus’] nonprofit Grameen Bank had been working with the Clinton Foundation’s Clinton Global Initiative programs as early as 2005, pledging millions of dollars in microloans for the poor. Grameen America, the bank’s nonprofit U.S. flagship, which Yunus chairs, has given between $100,000 and $250,000 to the foundation - a figure that bank spokeswoman Becky Asch said reflects the institution’s annual fees to attend CGI meetings. Another Grameen arm chaired by Yunus, Grameen Research, has donated between $25,000 and $50,000.

But Clinton didn’t need checks from Yunus to know who he was. In fact, the Clintons have a longstanding friendship with Yunus and admiration for his microcredit work that predates any financial contribution he made to the Clinton Foundation. Then-Arkansas Gov. Bill Clinton highlighted Yunus and Grameen Bank as a model for harnessing the “power of the government … to create market forces that work” in an interview with the Rolling Stone during his 1992 presidential run.

Clinton had met Yunus several years prior in an encounter organized by a friend of Hillary’s, Clinton told Rolling Stone.

Hillary Clinton first met Yunus in 1983, as first lady of Arkansas, she said in a January 2009 speech, at the start of her term as secretary of state. She had invited him to visit Arkansas so she could learn about ways microfinance ― a broader field of low-income banking of which microcredit is a part ― could relieve poverty in the state.

As a U.S. senator from New York, Clinton, as well as then-Massachusetts Sen. John Kerry and two other senators in 2007 sponsored a bill to award a congressional gold medal to Yunus. He got one but not until 2010, a year after Obama awarded him a Presidential Medal of Freedom.

Yunus first met with Clinton in Washington in April 2009. That was followed six months later by an announcement by USAID, the State Department’s foreign aid arm, that it was partnering with the Grameen Foundation, a nonprofit charity run by Yunus, in a $162 million commitment to extend its microfinance concept abroad. USAID also began providing loans and grants to the Grameen Foundation, totaling $2.2 million over Clinton’s tenure.

By September 2009, Yunus began complaining to Clinton’s top aides about what he perceived as poor treatment by Bangladesh’s government. His bank was accused of financial mismanagement of Norwegian government aid money ― a charge that Norway later dismissed as baseless. But Yunus told Melanne Verveer, a long-time Clinton aide who was an ambassador-at-large for global women’s issues, that Bangladesh officials refused to meet with him and asked the State Department for help in pressing his case.

“Please see if the issues of Grameen Bank can be raised in a friendly way,” he asked Verveer. Yunus sent “regards to H” and cited an upcoming Clinton Global Initiative event he planned to attend. 

Clinton ordered an aide: “Give to EAP rep,” referring the problem to the agency’s top east Asia expert.

Yunus continued writing to Verveer as pressure mounted on his bank. In December 2010, responding to a news report that Bangladesh’s prime minister was urging an investigation of Grameen Bank, Clinton told Verveer that she wanted to discuss the matter with her East Asia expert “ASAP.”

Clinton called Yunus in March 2011 after the Bangladesh government opened an inquiry into his oversight of Grameen Bank. Yunus had told Verveer by email that “the situation does not allow me to leave the country.” By mid-May, the Bangladesh government had forced Yunus to step down from the bank’s board. Yunus sent Clinton a copy of his resignation letter. In a separate note to Verveer, Clinton wrote: “Sad indeed.”

Clinton met with Yunus a second time in Washington in August 2011 and again in the Bangladesh capital of Dhaka in May 2012. Clinton’s arrival in Bangladesh came after Bangladesh authorities moved to seize control of Grameen Bank’s effort to find new leaders. Speaking to a town hall audience, Clinton warned the Bangladesh government that “we do not want to see any action taken that would in any way undermine or interfere in the operations of the Grameen Bank.”

Grameen America’s Asch noted that all foundation donations were made by Grameen entities and not personally from Yunus.

Former President Bill Clinton greeting Russian President Vladimir Putin at the World Economic Forum in Davos, Switzerland in
AFP/Getty Images
Former President Bill Clinton greeting Russian President Vladimir Putin at the World Economic Forum in Davos, Switzerland in Jan. 2009. Davos is a favorite get-together of the global elite.

The trouble with Clinton’s actions is not that she intervened on behalf of Yunus, a friend who predated her term as secretary of state. In a sea of hundreds of millions of dollars in foundation contributions, the six-figure contributions from institutions Yunus ran likely did not stand out.

It is that their longstanding friendship ― and shared membership in the Davos club ― blinded Clinton to the credibility of the malpractice claims against Yunus. Clinton simply asked her staff to intervene on his behalf without any apparent request to check into the allegations first.

Despite Yunus’ protestations, the investigation into his business activity was not without merit.

The Norwegian government objected to Yunus’ reallocation of $100 million meant for microloans in Bangladesh, after finding that Yunus had improperly moved it from his bank to a separate entity he owned. But Yunus only restored $30 million of the donation to the fund it had been earmarked for, according to the Danish-made documentary film “Caught in Micro Debt.”

When Norway expressed its concerns over Yunus’ handling of the money, he appealed to the country’s aid ministry to ensure that their rebukes did not reach a wider audience.

“If the people, within and outside government, who are not supportive of Grameen, get hold of this letter, we’ll face real problems in Bangladesh,” Yunus wrote in a letter to the director-general of the Norwegian aid ministry, which was revealed in the documentary.

Beyond Yunus’ alleged financial misdeeds, there is ample scholarship casting doubt on the scale of the success of the very microcredit techniques that are the source of his prestige.

As microlending operations have grown, they have become vulnerable to exploitation by unscrupulous individuals, who have turned many into for-profit, high-interest enterprises that trap poor borrowers in a never-ending cycle of debt.  

The left likes the attention to the poor, whereas the right like the individual responsibility aspect of a loan rather than a grant. Dean Karlan, Yale

Yunus’ Grameen Bank itself appears to have avoided accusations of this kind. Yunus nonetheless felt obligated to condemn the trend in a 2011 op-ed in The New York Times.

But even many experts who respect the achievements of microcredit and believe Grameen is a force for good overall argue that the strategy has failed to live up to its promise as a pathway out of poverty in developing countries. 

Microcredit “seems to have consistent benefits for keeping people out of extreme poverty,” but not allowing them to escape poverty entirely, said Kentaro Toyama of the University of Michigan, who has studied the practice.

Why then does Yunus continue to enjoy such acclaim for his microfinance work? One answer may lie in Bill Clinton’s 1992 comments to Rolling Stone about finding antipoverty policies that work within the free market rather than trying to upend or counter it.

The tiny loans have gotten traction with the Davos set, because the idea “appeals to all sides of the political fence,” said Dean Karlan, a global poverty reduction specialist at Yale who expressed a view similar to Toyama’s about the practice’s efficacy.

“The left likes the attention to the poor, whereas the right like the individual responsibility aspect of a loan rather than a grant,” he said. “It is a good example of markets working to make the world a better place.”  

In this way, microcredit has the advantage of indulging the Davos set’s self-serving conviction that there is no global problem that free markets cannot solve if properly oriented. That exonerates these elites from confronting the fact that the same capitalist system that has enriched them may be responsible for some of the world’s worst human suffering ― and that resolving those ills would require them to make more profound sacrifices than a tax-deductible donation that conveniently provides access to the world’s most powerful couple. 

Toyama attributes the popularity of Yunus’ microcredit among the philanthropic crowd to something much simpler: low risk and guaranteed return in the form of interest payments and perceived poverty reduction on the ground.

“You get your money back,” he said. “You really don’t have to do anything other than take a small hit on interest you might make on other means.”

By contrast, deeper anti-poverty measures like funding high-quality education in the developing world ― which has the potential to lift people out of poverty rather than merely alleviate it, as microfinance does ― require lots of “money, effort and extremely good management and leadership,” according to Toyama.

“All of those things are very hard and things wealthy people are reluctant to give to because it never pays itself back in the short term,” he said.  

Private equity titan Stephen Schwarzman (center) is a major donor to the Clinton Foundation. He got help from the State Depar
ASSOCIATED PRESS
Private equity titan Stephen Schwarzman (center) is a major donor to the Clinton Foundation. He got help from the State Department with a visa matter during Clinton's tenure.

In another case, Clinton was host at a September 2009 breakfast meeting at the New York Stock Exchange that listed Blackstone Group chairman Stephen Schwarzman as one of the attendees. Schwarzman’s firm is a major Clinton Foundation donor, but he personally donates heavily to GOP candidates and causes. One day after the breakfast, according to Clinton emails, the State Department was working on a visa issue at Schwarzman’s request. In December that same year, Schwarzman’s wife, Christine, sat at Clinton’s table during the Kennedy Center Honors. Clinton also introduced Schwarzman, then chairman of the Kennedy Center, before he spoke.

The Schwarzman meetings are typical of how elites are able to get better access to government officials and service than those who are not honored guests at the Kennedy Center. The visa issue Schwarzman needed assistance with was quite likely legitimate. His ability to get the personal assistance of the secretary of state does not add up to a bribe exchanged for a visa. But it reflects a stratified society in which the rich and well-connected can easily call in government favors to resolve issues that might require painstaking navigation of bureaucracy for ordinary citizens. 

Blackstone donated between $250,000 and $500,000 to the Clinton Foundation. Eight Blackstone executives also gave between $375,000 and $800,000 to the foundation. And Blackstone’s charitable arm has pledged millions of dollars in commitments to three Clinton Global aid projects ranging from the U.S. to the Mideast. Blackstone officials did not make Schwarzman available for comment.

When Clinton appeared before the U.S. Senate in early 2009 for her confirmation hearing as secretary of state, then- Sen. Richard Lugar, a Republican from Indiana, questioned her at length about the foundation and potential conflicts of interest. His concerns were focused on foreign government donations, mostly to CGI. Lugar wanted more transparency than was ultimately agreed upon between the foundation and Obama’s transition team.

Now, Lugar hopes Hillary and Bill Clinton make a clean break from the foundation.

“The Clintons, as they approach the presidency, if they are successful, will have to work with their attorneys to make certain that rules of the road are drawn up to give confidence to them and the American public that there will not be favoritism,” Lugar said. 

But even if the Clintons are no longer formally involved with the foundation or its finances, the friendships and status they cultivated as celebrated members of the global elite will persist. As a result, the favoritism Clinton showed as secretary of state will likely continue if and when she occupies the White House.

*The AP excluded donations from foreign governments who ended up getting meetings, “because such meetings would presumably have been part of her diplomatic duties.” That makes no sense. Nearly all of the other meetings Clinton had ― with a nonprofit doing global AIDS work, for instance ― were also part of diplomatic duties, as was overseeing the visa process. The question is not whether the duties fall within or without the scope of a secretary of state, but whether she favored one such duty over another as a result of this web of relationships. So we fixed this for the AP by adding foreign governments back in. As a result, we have removed the proportion of visits by donors that the AP calculated.

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