Wall Street Whistleblower Turns His Scrutiny on the Clinton Foundation

Charles Ortel: ‘This is a charity fraud’

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The Wall Street analyst who uncovered financial discrepancies at General Electric before its stock crashed in 2008 claims the Bill, Hillary, and Chelsea Clinton Foundation has a number of irregularities in its tax records and could be violating state laws.

Charles Ortel, a longtime financial adviser, said he has spent the past 15 months digging into the Clinton Foundation’s public records, federal and state-level tax filings, and donor disclosures. That includes records from the foundation’s many offshoots—including the Clinton Health Access Initiative and the Clinton Global Initiative—as well as its foreign subsidiaries.

According to Ortel’s reports, the contribution disclosures from the Clinton Foundation don’t match up with individual donors’ records. He also argued that the foundation is not in compliance with some state laws regarding fundraising registration, disclosure requirements, and auditing rules.

This week, Ortel is starting to release his findings in the first of a series of up to 40 planned reports on his website. His allegation: "this is a charity fraud."

"Starting almost 20 years ago in 1997, the Clinton Foundation spread its activities from Little Rock, Arkansas, to all U.S. states and to numerous foreign countries without taking legally required steps to function and solicit as a duly constituted public charity," wrote Ortel, in a letter posted on his website.

Although Ortel has been a commentator for conservative outlets, his findings might not be easy for authorities to ignore. After spending decades working in mergers and acquisitions at some of Wall Street’s top firms, he has been an early whistleblower on financial irregularities at companies such as General Electric and AIG.

The Sunday Times of London described Ortel as "one of the finest analysts of financial statements on the planet" in a 2009 story detailing the troubles at AIG.

"Where you or I see pages of numbers, [Ortel] sees a narrative," wrote Sunday Times reporter Tim Rayment. "Sometimes the theme is a company’s potential for growth. Sometimes it is the prospect of self-destruction. And at times the story does not make sense, because the figures are hiding a fraud."

Ortel started on Wall Street at age 24, going straight from Harvard Business School to the prominent mergers and acquisition firm Dillon Read, which has since closed. He later moved on to boutique firms before retiring early in 2002 to focus on raising his children as a single father.

Ortel said in early 2007 he decided to start his own financial advisory firm. As a refresher, he set out to analyze a few complex companies to see how the market was currently valuing those stocks. He said he chose 25 big ones, including the well-regarded conglomerate GE.

"To my shock and horror, as I tore it apart, I realized it was overvalued in the hundreds of millions of dollars," he said. "It was a bad bank masquerading as a good industrial company."

Ortel said he started alerting investor friends and sending out memos about his findings. He pitched some media outlets, without much success.

Finally, Ortel said, he reached out to the Sunday Times and got some traction. The paper published an article raising concerns in February 2008 called "The Nagging Worries at Mighty GE."

Two months after the story, GE stunned investors by missing its earning projections for the first time in decades, sending its stock crashing. By the next spring, the financial giant’s stock prices had dropped from nearly $40 a share to under $6, an 18-year low.

Ortel turned his attention to the Clinton Foundation in February 2015. To learn more about the charity, he decided to take it apart and see how it worked.

"I decided, as I did with GE, let’s pick one that’s complicated," said Ortel. "The Clinton Foundation is complicated, but it’s really very small compared to GE."

When Ortel tried to match up the Clinton Foundation’s tax filings with the disclosure reports from its major donors, he said he started to find problems.

"I decided it would be fun to cross-check what their donors thought they did when they donated to the Clinton Foundation, and that’s when I got really irritated," he said. "There are massive discrepancies between what some of the major donors say they gave to the Clinton Foundation to do, and what the Clinton Foundation said what they got from the donors and what they did with it."

Last year, the Clinton Foundation was forced to issue corrected tax filings for several years to correct donation errors. But Ortel said many of the discrepancies remain.

Ortel said his reports in the coming months would also provide evidence that the foundation is not complying with state laws on fundraising, financial disclosure, and audits.

"I’m against charity fraud. I think people in both parties are against charity fraud, and this is a charity fraud," he said.

Ortel said he hoped the reports would encourage investigative journalists to follow up on his findings.

A spokesperson for the Clinton Foundation did not comment on the claims.

Ethics watchdogs also said they hope the reports will lead to renewed scrutiny. Ken Boehm, chairman of the National Legal and Policy Center, said he was "very impressed with the points [Ortel] makes in his letter regarding the release of his analyses."

"Charles Ortel has clearly done a yeoman job identifying the legal, tax and accounting problems plaguing years of filings relating to the Clinton Foundation," said Boehm. "His planned release of his analyses represents an important public service which will result in the scrutiny these filings deserve. Mr. Ortel's experienced eye has already caught numerous issues never before disclosed and his future disclosures deserve close attention."

Alana Goodman   Email | Full Bio | RSS
Alana Goodman is a staff writer for the Washington Free Beacon. Prior to joining the Beacon, she was assistant online editor at Commentary. She has written for the Weekly Standard, the New York Post and the Washington Examiner. Goodman graduated from the University of Massachusetts in 2010, and lives in Washington, D.C. Her Twitter handle is @alanagoodman. Her email address is goodman@freebeacon.com.