Judge Considers Tossing Clinton Foundation Whistleblower Case After Durham Report Revelations

Former U.S. Secretary of State Hillary Clinton speaks during a panel at the Vital Voices Global Festival in Washington on May 5, 2023. Madalina Vasiliu/The Epoch Times

A federal judge is weighing whether to throw out a case against the IRS that alleges the Clinton Foundation violated federal law and should have its tax-exempt status revoked.

U.S. Tax Court Judge David Gustafson on May 30 asked the government and experts who brought a whistleblower claim to the IRS based on a years-long investigation of the foundation to submit additional filings in light of recent developments in other cases.

Rulings in those cases “may affect the parties’ positions as to the pending motions,” Gustafson wrote in a brief order (pdf), which was first reported by Just the News. “We will order further filings so that the parties may address those recent opinions,” he added.

Those opinions include an appeals court ruling (pdf) in favor of the government in a case brought by a whistleblower who offered what he said was evidence a company was not paying enough taxes.

John Moynihan, a former federal agent, and Lawrence Doyle, a tax expert, brought evidence to the IRS in 2017 that they say shows the Clinton Foundation violated U.S. law by acting as a foreign agent without registering as one.

The IRS denied the claims after interviewing one of the people cited and determining the evidence “was not credible” due to the person’s denials. An appeal of the determination was turned down, prompting Moynihan and Doyle to take the matter to U.S. Tax Court.

The government tried convincing Gustafson to toss the case, but in a 2020 ruling, he rejected the bid, finding that the IRS’s whistleblower’s office had “abused its discretion” by making unsupported statements in its determination.

A new motion to dismiss the case for lack of jurisdiction was lodged in 2022 and is currently under consideration. The motion and an opposition filing from Moynihan and Doyle were not available on the court docket.

In addition to the U.S. Court of Appeals for the District of Columbia Circuit opinion in Villa-Arce v. Commissioner, Gustafson referenced two other rulings:

• A ruling (pdf) by the same court found that the tax court had jurisdiction to consider a whistleblower claim but that the court correctly threw out a case brought by a whistleblower.
• A ruling (pdf) by the tax court found that the IRS appeared to correctly deny a whistleblower award to a man who was interviewed during an investigation.

Moynihan and Doyle did not return requests for comment. The IRS and the U.S. Department of Justice did not respond to inquiries.

Earlier Testimony

Appearing before Congress in 2018, Moynihan and Doyle said they uncovered evidence indicating the Clinton Foundation violated the law.

“The foundation began acting as an agent of foreign governments throughout its life and continues to do so. As such, they should have registered under FARA,” or the Foreign Agents Registration Act, Doyle said.

The foundation also intentionally misused funds from donors, Moynihan said.

“The investigation clearly demonstrates the foundation was not a charitable organization, per se, but, point of fact, was a closely held family partnership. As such, it was governed in a fashion in which it sought in large measure to advance the personal interests of its principals,” he said.

The violations mean the foundation should no longer be entitled to its tax-exempt privileges, the experts said.

The Clinton Foundation did not respond to a request for comment. A spokesperson told The Hill when the claim was first sent to the IRS that the foundation has been “subjected to outrageous, politically motivated allegations that have been proven false time and time again.”

WikiLeaks

Files obtained and published by WikiLeaks revealed that the foundation was audited multiple times.

One of the auditor reports said the foundation was “missing several policies/procedures that are required by law” and that “there is no established mechanism for catching problems and mistakes.”

Another (pdf) said that some employees were unaware of policies on conflicts of interest and outside employment and recommended implementing “a clear gift acceptance policy and procedures to ensure that all donors are properly vetted.”

Former President Bill Clinton’s top aide, Douglas Band, wrote in one email that the ex-president received income and “many expensive gifts” from some of the foundation’s donors. Some of the foundation’s employees told auditors that donors “may have an expectation of quid pro quo benefits in return for [a] gift.”

Recent Developments

The new order came after special counsel John Durham’s report revealed that FBI agents launched three probes ahead of the 2016 election into the Clinton Foundation, acting on allegations the foundation had carried out criminal activities.

Top officials tried to shut down the probes but relented after receiving pushback. They still ordered agents to get approval before taking any overt investigative steps.

The investigations were ultimately consolidated in Arkansas and ended after U.S. prosecutors there declined to file charges, according to another set of documents obtained through the Freedom of Information Act.

The Department of Justice declined to comment on the revelations.