The conflict-of-interest agreement which cleared the way for President-elect Obama to move forward with the nomination of Senator Clinton as secretary of state breaks new ground in many respects, but the deal to regulate and monitor President Clinton's activities actually falls short of some requirements set forth in legislation a Senate committee approved last year.
The pact hammered out by represenatives of President-elect Obama and President Clinton calls for the former president's foundation to name its future donors only on an annual basis, according to talking points provided on Saturday to Politico and the New York Times. The legislation moved to the Senate floor last year would have required quarterly reports. In addition, the proposed bill would have required the disclosure of the exact amount given by each donor of more than $1,250 each quarter to an open library and every donor of $200 or more to a planned library. As described to the press, and confirmed by a transition official who asked not to be named, the Obama-Clinton deal does not require such precision, nor does it call for disclosure of donors' addresses and occupations, which the Senate bill would have.
An unnamed Democratic official told Politico that the agreement "speaks to President Clinton's willingness to do more than what was asked of him." However, in some respects, Mr. Obama apparently asked less of Mr. Clinton than the proposed legislation would have.
Among the major concessions from Mr. Clinton were promises to separate part of his international aid effort, the Clinton Global Initiative, from the foundation which directly supports his presidential library in Little Rock, Ark.; to suspend all Clinton Global Initiative "annual events" overseas; to reject all foreign government donations to the initiative, and to advise the State Department in advance of the backers of his paid speeches and consultant work. The deal also goes further than the legislation by requiring the naming of small donors as well as past donors.
The substitution of annual reports for a quarterly ones is not trivial. Anyone who has tried to assess the activites of a nonprofit group based on annual 990 forms filed with the IRS knows the lag time devalues the information. Names without addresses and occupations also flummox efforts to identify donors. All in all, though, the deficiencies are not huge. Still, it's a bit puzzling that such a heavily-lawyered deal would be left open to any claim that it falls short of any reasonable yardstick, especially one that Mr. Obama seemed to endorse. Politico called the deal "remarkable," but it's also notable that the lawyers who represented Mr. Obama were unable in some areas to get the Clinton legal team to agree even to the baseline established by the Senate bill.
The talking points also make no mention of of Mr. Clinton's primary-season pledge to sever financial ties with investor Ron Burkle and a Dubai-related investment if Mrs. Clinton won the nomination. Does that promise to divest carry forward to her nomination or confirmation as secretary of state? Should it? A spokesman for Mr. Clinton could offer no update last night on plans for the former president's ties to Mr. Burkle's Yucaipa funds.
The Wall Street Journal estimated in January that Mr. Clinton could get a $20 million payout by unwinding his Yucaipa investments. However, that was before the market crash which hit many private equity investments even harder. If Mr. Clinton held off on selling his Yucaipa stakes, they may only be worth a fraction of their value earlier in the year.
In February 2008, Senate Democrats tried to pass the library fundraising legislation by unanimous consent. However, Senator Stevens, a Republican, objected, arguing that it was unfair to change the rules on President Bush in midstream. A version of the bill the House passed last year exempted President Clinton altogether, along with all presidents out of office for more than four years.
It's not clear precisely where Mr. Obama or Mrs. Clinton stood on the Senate bill, though both Democrats presumably cleared it for the attempted unanimous-consent passage. Mr. Obama is a member of the Homeland Security and Governmental Affairs Committee which approved the the Presidential Library Donation Reform Act on a voice vote in August 2007, but he was absent from the markup. An ethics plan he released in September of that year called for disclosure of "all donations to organizations affiliated with the president."
At a Democratic primary debate that same month, Mrs. Clinton was asked whether she supported full disclosure of library donations. She pointed to legislation she co-sponsored in 2001 that would have required an annual disclosure of all gifts or pledges of $5000 or more to a presidential library. That measure, which did not pass, would have affected only future presidents, not Mr. Clinton or President Bush.
For what it's worth, I did a TV interview on Fox Business a few weeks back talking about some of these issues. My general take was and is that the work the Clinton Foundation does on AIDS and development issues is valuable and it would be stupid to suspend it or substantially hamper it, especially when the U.S. Government is beyond bankrupt. If Mr. Clinton can get oil sheikhs to pay for anti-retrovirals for Africa, God bless him. Some of the concessions in the ethics deal, like ending his foundation's "annual events" outside the U.S. seem unnecessary to me. But, as I told Fox, "real-time" transparency about donations is the only cure to the conlficts issue raised by Mrs. Clinton's diplomatic post. I suspect that's where this will ultimately wind up by the end of the confirmation process, but we'll see.