{"id":2207,"date":"2015-07-11T19:49:44","date_gmt":"2015-07-12T01:49:44","guid":{"rendered":"http:\/\/www.orderofephors.com\/?p=2207"},"modified":"2015-07-11T19:49:44","modified_gmt":"2015-07-12T01:49:44","slug":"the-clintons-achilles-heel","status":"publish","type":"post","link":"https:\/\/www.orderofephors.com\/?p=2207","title":{"rendered":"The Clintons’ Achilles Heel?"},"content":{"rendered":"

For most of the 20th<\/sup> century, until 1989, the major public accounting firms in the U.S. and the U.K. were known as the Big Eight.\u00a0 Listed alphabetically, they were Arthur Anderson, Arthur Young & Company, Coopers & Lybrand, Ernst & Whinney, Deloitte Haskins & Sells, Peat Marwick Mitchell, Price Waterhouse, and Touche Ross.<\/p>\n

However, in 1987, Peat Marwick Mitchell merged with Klynveld Main Goerdeler, a mid-sized European firm, to become KPMG.\u00a0 Then, in 1989, Ernst & Whinney merged with Arthur Young to form Ernst & Young<\/a>, and Deloitte Haskins & Sells merged with Touche Ross to become Deloitte & Touche.\u00a0 Finally, in 1998, Price Waterhouse merged with Coopers & Lybrand to become Pricewaterhouse Coopers.\u00a0 Along with Arthur Anderson, they made up the Big Five.<\/p>\n

Arthur Anderson was founded in 1913.\u00a0 Its namesake founder, Arthur Anderson, was a man who held closely to the highest standards of the accounting profession, insisting that the accountant\u2019s first responsibility was to his client\u2019s investors, not to his client\u2019s management.\u00a0 However, by the 1980s, because of intense competition between the top accounting firms for non-accounting consulting services, that standard was beginning to show signs of erosion.\u00a0 Within each firm, the commitment to audit independence was slowly eroded as they strove to win more-lucrative non-accounting consultancy contracts with their major clients.<\/p>\n

One of Arthur Anderson\u2019s principal clients was the Houston-based energy company, Enron.\u00a0 And as the firm\u2019s revenues from their non-accounting consultancy at Enron far exceeded their audit and accounting revenues, those involved in the audit and accounting end of their business were increasingly pressured to do what was necessary to keep Enron\u2019s top management happy.\u00a0 In other words, Arthur Anderson experienced an ongoing internal struggle, attempting to balance the need to maintain the highest of accounting standards, while contributing to the client\u2019s desire to produce the most attractive quarterly and annual earnings reports.<\/p>\n

Finally, in 2001, it was learned that Enron had maintained its position as an attractive investment opportunity in large part through systematic accounting fraud\u2026 none of which could have been accomplished without the active complicity of their accounting firm, Arthur Anderson.<\/p>\n

When accounting irregularities involving some $100 billion were alleged, the members of Enron\u2019s board of directors appointed a committee, the Powers Committee, to look into the matter.\u00a0 The committee\u2019s final report stated that, \u201cThe evidence available to us suggests that Andersen did not fulfill its professional responsibilities in connection with its audits of Enron’s financial statements, or its obligation to bring to the attention of Enron’s Board (or the Audit and Compliance Committee) concerns about Enron’s internal contracts over the related-party transactions.\u201d<\/p>\n

On December 2, 2001, Enron filed for Chapter 11 bankruptcy, and six months later, on June 15, 2002, Arthur Andersen was convicted of obstruction of justice<\/a>, having been found guilty of shredding documents related to its auditing of Enron<\/a>.\u00a0 And while the conviction was later overturned <\/a>by the U.S. Supreme Court<\/a>, the negative publicity resulting from the high profile scandal, combined with the findings of criminal complicity, ultimately destroyed the firm.\u00a0 On August 31, 2002, Arthur Anderson agreed to surrender its CPA license and its right to practice before the SEC\u2026 and then there were four.<\/p>\n

Of the remaining top four accounting firms, Pricewaterhouse Coopers (PwC) has been seen, until now, as the \u201ccream of the crop.\u201d\u00a0 In fact, among the Big Four, PwC has been ranked by Vault Accounting as the best accounting employer for two consecutive years, 2014 and 2015.\u00a0 But now, because of their association with the Bill, Hillary, and Chelsea Clinton Foundation, PwC is about to learn, first hand, the meaning of the old adage, \u201cLie down with dogs; get up with fleas.\u201d<\/p>\n

In a June 17, 2015, posting on WorldNetDaily (WND), bestselling author Dr. Jerome Corsi, reports that, according to respected Wall Street analyst Charles Ortel, \u201cThe Big Four accounting firm, Pricewaterhouse Coopers, failed to detect and report the Clinton Foundation\u2019s \u2018apparent massive diversions of funds\u2019 from a global charity that fights HIV\/AIDS.\u201d<\/p>\n

Although the methodology is a bit difficult for non-accountants to grasp, Ortel charges that the Clintons siphoned off tens of millions of dollars annually from pass-through funds received by the Clinton Health Access Initiative (CHAI) from UNITAID, a Geneva-based global health organization which negotiates low prices for drugs and diagnostic equipment and supplies, working through groups such as CHAI to deliver drugs and health services where needed.<\/p>\n

The pool of funds used to finance UNITAID\u2019s activities is derived from a US$1 surcharge on coach-class airline tickets (up to US$40 on business and first class tickets) in nine countries: Cameroon, Chile, Congo, France, Madagascar, Mali, Mauritius, Niger and the Republic of Korea. \u00a0A<\/a>ccording to records of the French Civil Aviation Authority, the tax imposed on airline tickets by the French government alone has produced more than $1 billion in a six year period.<\/p>\n

According to the WND article, Ortel contends that PwC \u201callowed the Clintons to continue diverting millions of dollars donated for charitable purposes to the personal enrichment and benefit of themselves and their close associates, perpetrating a crime called inurement.\u00a0 <\/em>(The \u201cinurement\u201d prohibition of the Internal Revenue Code prohibits the use of the income or the assets of a tax-exempt organization, such as the Clinton Foundation, to directly or indirectly benefit any person with a close relationship with the organization, or one who is in a position to exercise significant control over the organization.)<\/p>\n

In order to reach that conclusion, Ortel used financial information drawn directly from UNITAID sources, comparing it to financial reports of the Clinton Foundation contained in their PwC audit for 2013.\u00a0 Ortel contends that \u201cPwC failed to conduct the basic due diligence required of auditors, neglecting to discover and report the diversion of funds.\u201d\u00a0 He found that, as has been reported in recent stories of Hillary Clinton\u2019s tenure as U.S. Secretary of State, the Clintons purportedly used their international prestige and political power to \u201cleverage\u201d international manufacturers of prescription quality drugs and various health care products and sell them to Third-World countries at a discount to combat AIDS\/HIV.<\/p>\n

WND quotes Ortel as saying that, if any of the 50 state attorneys general should present the available evidence to a federal judge, he believes \u201can injunction would be ordered, shutting down the Clinton Foundation and placing the organization in receivership.\u201d<\/p>\n

He is quoted as saying, \u201cIronically, the Clinton Family holds itself out for praise when Clinton Foundation financial statements are inaccurate and riddled with material, uncorrected errors.\u201d\u00a0 He concludes. \u201cThose who take requisite time to study public financial filings should see what I see \u2013 that the Clintons are playing \u2018Robin Hood,\u2019 but in reverse, now with a major accounting firm of PwC\u2019s magnitude participating in the cover-up.\u201d\u00a0 In other words, what Ortel suggests is that the Clintons, instead of taking from the rich and giving to the poor, are profiting from the poor to give to the rich\u2026 i.e. the Clintons and their toadies.<\/p>\n

What is surprising\u2026 perhaps not so surprising where the Clintons are concerned\u2026 is the fact that neither PwC, nor any other Clinton Foundation auditor since 2006, has bothered to reconcile Clinton Foundation receipts from UNITAID, as reported on their IRS Form 990, with audited annual financial statements published by UNITAID.\u00a0 In other words, in examining the financial dealings of the most corrupt political family in America, none of the most highly paid accounting professionals in the country thought to look for corruption in any of the most logical places.<\/p>\n

So where did the Clintons get off on the wrong track?\u00a0 Upon leaving the White House in disgrace in January 2001, Bill Clinton, a disbarred lawyer who narrowly avoided criminal prosecution for perjuring himself before a federal judge, was desperate to find some way to salvage a positive legacy for the history books.<\/p>\n

Like modern era Republican presidents\u2026 Eisenhower, Nixon, Reagan, Bush (41) and Bush (43)\u2026 he could have retired gracefully into relative obscurity.\u00a0 He could have retired to a posh hilltop mansion near Hot Springs where he could spend all of his free time patronizing the spas and nudie bars of that famed Arkansas gambling mecca.\u00a0 But that\u2019s not what he chose to do.\u00a0 Like his Democrat predecessor, Jimmy Carter, Clinton could not find happiness and contentment outside the political spotlight.\u00a0 Instead, he decided to establish a path to respectability by creating a foundation dedicated to helping the poor and downtrodden of the Third World.\u00a0 That was the genesis of the Clinton Foundation and the Clinton Global Initiative.\u00a0 And while the Clinton Foundation and the Clinton Global Initiative may have washed a bit of the seediness off the Clinton image, it is the excesses of the Clinton Foundation that may ultimately destroy Hillary Clinton\u2019s dream of ever becoming the first female president of the United States.<\/p>\n

But more than that, the Clintons\u2019 unbridled greed and their unquenchable thirst for power could easily reduce the Big Four of the accounting profession to the Big Three\u2026 taking thousands of accounting executives and their families down with them.\u00a0 If Ortel\u2019s findings are ultimately confirmed, the Clinton era of American politics may finally be at an end.\u00a0 More than Benghazi, the missing emails, the private email server, the outlandish speaking fees, and the suspected \u00a0pay-to-play quid pro quo\u2019s<\/em> of Hillary\u2019s state department tenure, the alleged fraudulent accounting provided by PwC, the country\u2019s top accounting firm, may yet be the Clintons\u2019 Achilles heel.<\/p>\n

Now all we have to do is to get one of our fine conservative state attorneys general to get off their backsides and take the available evidence before a federal judge.\u00a0 Bill and Hillary will soon learn that attempting to hoodwink the IRS and the SEC is almost certain to meet with disaster.<\/p>\n

Paul R. Hollrah is a retired government relations executive and a two-time member of the U.S. Electoral College.\u00a0 He currently lives and writes among the hills and lakes of northeast Oklahoma\u2019s Green Country.<\/em><\/p>\n

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For most of the 20th century, until 1989, the major public accounting firms in the U.S. and the U.K. were known as the Big Eight.\u00a0 Listed alphabetically, they were Arthur Anderson, Arthur Young & Company, Coopers & Lybrand, Ernst & … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.orderofephors.com\/index.php?rest_route=\/wp\/v2\/posts\/2207"}],"collection":[{"href":"https:\/\/www.orderofephors.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.orderofephors.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.orderofephors.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.orderofephors.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2207"}],"version-history":[{"count":1,"href":"https:\/\/www.orderofephors.com\/index.php?rest_route=\/wp\/v2\/posts\/2207\/revisions"}],"predecessor-version":[{"id":2208,"href":"https:\/\/www.orderofephors.com\/index.php?rest_route=\/wp\/v2\/posts\/2207\/revisions\/2208"}],"wp:attachment":[{"href":"https:\/\/www.orderofephors.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2207"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.orderofephors.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2207"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.orderofephors.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2207"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}