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Chelsea flagged 'serious concerns' about Clinton Foundation conflicts

Chelsea Clinton flagged “serious concerns” about her father’s closest aides trying to cash in by using the former president’s name to gain access to government officials on behalf of paying clients, according to hacked emails released this week.

The emails, which were disseminated by WikiLeaks, reveal the bitter tensions within the Clintons’ inner circle that were inflamed when Chelsea Clinton tried to put an end to practices that blurred the line between the foundation, governments and a consulting firm called Teneo that paid Bill Clinton.

Some of the concerns raised by the former first daughter echo attacks that have been dogging her mother Hillary Clinton during her presidential campaign. Clinton’s GOP rival Donald Trump and other Republicans allege that the Clintons used their foundation and private business arrangements to enrich themselves by essentially auctioning off access to the powerful family and their associates in government — including during Hillary Clinton’s tenure as secretary of state.

Teneo, in particular, did lucrative work for foundation donors and entities with business before Clinton’s State Department. And it signed a contract reportedly worth $3.5 million with Bill Clinton to serve as an adviser (though the former president ultimately kept only $100,000 of that, according to his tax returns and a source familiar with the arrangement). Teneo also paid Huma Abedin, Hillary Clinton’s right-hand woman at the State Department, as a “senior advisor.”

One of the pair of Clintonites who founded Teneo, Declan Kelly, was working for Clinton’s State Department while laying the groundwork for the firm, as revealed by POLITICO. POLITICO also exposed that the other Teneo founder, longtime Bill Clinton aide Doug Band, was drawing salaries from both the Clinton Foundation and the former president’s taxpayer-subsidized personal office, while another early Teneo official, Justin Cooper, was being paid by Clinton’s taxpayer-funded office, even as he was performing maintenance on Hillary Clinton’s controversial private email server.

In December 2011, Chelsea Clinton sent a sharply worded email to top family confidantes saying that people in London had raised “serious concerns” about the way Teneo was using her father’s name to set up meetings for clients, according to private emails released by WikiLeaks. “I will raise all of this and more with my father this evening,” she wrote. “Wanted to update you all in the meanwhile about my augmented concerns post London. . .”

At the time, Chelsea Clinton had already been pushing to enact tougher rules at the foundation regarding conflicts of interest and outside income. In response, Band blasted her behind her back as irrational and ungrateful who runs “to daddy to change a decision or interject herself in the process.”

In the emails released by WikiLeaks on Monday and Tuesday, Band dismissed Clinton as an entitled and power-hungry young woman who wreaked havoc at the Clinton Foundation — and who created a stressful environment that contributed to one person’s contemplating suicide — simply because she was bored and protective of her relationship with her father.

“She is acting like a spoiled brat kid who has nothing else to do but create issues to justify what she’s doing because she, as she has said, hasn’t found her way and has a lack of focus in her life,” Band wrote in a November 2011 email to longtime Clinton family adviser John Podesta.

Band added that Teneo “has almost nothing to do with the Clintons, the foundation or (the Clinton Global Initiative) in any way.”

Podesta urged Band to try to avoid sparring with Chelsea Clinton, but at the same time he was emailing with her and others in a manner that seemed to validate Chelsea’s concerns about setting up outside procedures for dealing with Teneo.

A former White House chief of staff to Bill Clinton, Podesta is now serving as the chairman of Hillary Clinton’s presidential campaign, and the emails WikiLeaks released came from his personal account.

Podesta and Band did not respond on Tuesday to questions about the emails, nor did representatives for Chelsea Clinton, Bill Clinton or the Clinton Foundation.

Glen Caplin, a spokesperson for Hillary Clinton’s campaign, declined to answer questions about the dispute over Teneo, instead alleging that the hack was the work of Russia and intended “to help Donald Trump become President of the United States.”

While U.S. intelligence officials have fingered the Russia government for other hacks intended to influence the presidential election, there is no evidence that Russia is behind the hack of Podesta’s emails.

Podesta has been a close personal adviser to the Clintons for decades.

In late 2011 — the period covered by most of the WikiLeaks emails related to the foundation and Teneo — Podesta agreed to serve as the Clinton Foundation’s temporary CEO after its longtime CEO, Bruce Lindsey, the Clintons’ old Arkansas lawyer, suffered a stroke.

Podesta inherited an organization that was still being run to some extent like a Bill Clinton personality cult steered by the former president’s friends and former aides, even as it had grown into a $2-billion global philanthropy credited with major breakthroughs in fighting childhood obesity and AIDS.

At the time, Chelsea Clinton — newly married, bearing an Ivy League master’s degree in public health and coming off stints on Wall Street and at the consulting powerhouse McKinsey & Company — had joined the board of one of the foundation’s subsidiaries and begun seeking to instill data-driven management techniques across the foundation.

Clinton initiated a 2011 audit by the New York law firm Simpson Thacher focusing partly on “potential conflicts of interest.” The firm conducted 38 interviews with employees and officials, explaining in a Simpson Thacher document released by WikiLeaks Tuesday that “many interviewees were unaware” of the foundation’s policies related to conflicts of interests and outside employment.

Chelsea Clinton’s efforts to reform the foundation were perceived within the foundation as a vote of no-confidence in Band, Lindsey and the Clinton old guard, according to interviews with a handful of sources who worked with or around the foundation.

During a November 2011 meeting, Band complained to Bill Clinton that his daughter’s efforts to implement conflict of interest rules were actually a thinly veiled effort “to push him out, take over,” according to an email from Chelsea Clinton to Podesta. “Dad kept asking him — has she said that to you? To anyone? She’s never said it to me and I think she’s been very clear and consistent in her goals, etc.,” Chelsea Clinton continued in the email, which was sent from a pseudonymous email address bearing the name Anna James and associated with New York University, where she served as an assistant vice provost.

Those goals, according to Chelsea Clinton’s email, “were to help to take stock, professionalize the Foundation, build it for the future and build it in such a way that supported his work and mom’s.”

But, as POLITICO reported last year, Chelsea Clinton, who had by that point become the foundation’s vice chair, was seen by some in the foundation’s rank-and-file as distant and intimidating, while some officials saw her as using her relationship with her father to get her way.

In a December 2011 email to Podesta and Cheryl Mills, who was then serving as Hillary Clinton’s chief of staff in the State Department, Band alleged that “the stress of all of this office crap with (Bill Clinton) and (Chelsea Clinton)” had contributed to pushing a top foundation official to the brink of suicide.

And Lindsey “said the stress of specifically the office had caused his very serious health issues,” according to Band’s email. Lindsey did not respond to a request for comment, nor did the foundation official who Band indicated had become suicidal, who has since left the foundation.

Band suggested that Chelsea Clinton should have been more concerned about “her role in what happened to” Lindsey and the allegedly suicidal staffer, as well as “what she is doing to” the Clinton Foundation, and with stories about her father’s marital infidelity.

Instead, though, Band contended in a January 2012 email to Podesta, Mills and family friend Terry McAuliffe (now the governor of Virginia) that Chelsea Clinton was courting trouble by openly telling people outside the foundation “that she is conducting an internal investigation of money within the foundation.” According to Band’s email, which was released Tuesday, Clinton relayed this to “one of the bush 43 kids,” who “then told an operative within the republican party … Not smart.”

In another email, Band suggested that Chelsea was trying to drive a wedge between him and Bill Clinton by highlighting a news story reporting that a controversial financial services firm called MF Global had been paying Teneo $125,000 a month.

In fact, Chelsea Clinton had forwarded a version of that story in December 2011 to Podesta, Lindsey, McAuliffe, as well as two Simpson Thacher officials. Clinton requested that the story be added to the news clips presented to her father, presumably via print-outs, since he eschews email, suggesting that negative coverage of Teneo is typically kept from him.

Chelsea Clinton indicated that during a trip to London “two people separately voiced concerns directly to me about Teneo,” while a third told her chief of staff that a Bill Clinton staffer “has called Members of the House and Members of Parliament, ‘on behalf of President Clinton,’ for Teneo clients” including Dow Chemical, a major Clinton Foundation donor.

These calls, according to Chelsea Clinton, were made “without my father’s knowledge and inelegantly and ineffectually at best.” The situation has led to “people in London making comparisons between my father and Tony Blair’s profit motivations. Which would horrify my father.”

Podesta responded: “We need to move to a resolution of this quickly,” to which Clinton agreed, asking whether Mills and McAuliffe had made any progress working out an agreement with Band and Cooper relating to outside income.

Less than two weeks later, Mills emailed Podesta, Band and Cooper with what a draft of a document proposing what it called an “Infrastructure Model” for the Clinton Foundation.

It outlines a number of proposed structures for handling Bill Clinton’s personal, political and foundation business, but the common theme in each is that Band and Cooper would be less central to the operation. They would “not have any obligation or authority regarding the implementation of decisions,” the document says and “would no longer serve as either employees or consultants to the Foundation; should the Foundation or its affiliated entities desire their services, they would engage them directly, through a personal consulting contract, to provide mutually agreeable services.”

A later draft of the document indicates that Bill Clinton’s role with Teneo, which it says began in July 2011, with Clinton serving “as an advisor to Teneo in support of its establishment and start-up” would end. “Commencing January 1, 2012, the President instead will become a client of Teneo; Teneo principals will provide consulting services to the President in his personal capacity.”

On Dec. 22, 2012, a Simpson Thacher official forwarded to Mills and Podesta a draft of Bill Clinton’s letter resigning from Teneo’s advisory board, in which he said he applauded “the wonderful work that you are doing, and I wish you and the firm all success in the future.”

Band continued to be paid by the Clinton Foundation into 2012, and by Bill Clinton’s taxpayer-subsidized personal office through January 2013, but he has since become distanced from the family, even as Teneo’s clientele continued to overlap with the Clinton Foundation’s donor rolls.

Josh Gerstein and Nolan D. McCaskill contributed reporting.

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