A Blip in Hillary Clinton's Senate Lovefest: Bill's Donations

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Susan Walsh / AP

Senator Richard Lugar and Secretary of State–designate Hillary Clinton arrive for Clinton's nomination hearing on Capitol Hill

Things could not have gone more smoothly for Secretary of State–nominee Hillary Clinton in her Senate confirmation hearings on Tuesday. Completely on top of her brief, Clinton was masterful on issues as obscure as America's arctic territorial concerns and the Law of the Sea treaty, and she deftly threaded the needle on such contentious issues as the fighting in Gaza and historic Turkish-Armenian tensions. Republicans and Democrats alike were lavish in their praise. Senator Richard Lugar, the ranking Republican, extolled "her impressive skills, her compassion, her collegiality." California Democratic Senator Barbara Boxer blurted out, "I'm so excited to see you here today!" Even firebrand South Carolina Republican Senator Jim DeMint said he was "optimistic and hopeful about [Clinton's] role as Secretary of State."

Everything went perfectly. Everything, except for one detail: the matter of President Bill Clinton's charitable endeavors, including the William J. Clinton Foundation and the Clinton Global Initiative, and the danger that they might taint Hillary Clinton's role as Secretary of State. The foundation, according to its public disclosure documents, aims to promote "the values of fairness and opportunity for all" as well as "health security, economic empowerment, leadership development, citizen service, and racial, ethnic and religious reconciliation." Clinton described her husband's Global Initiative, part of his foundation, as a "pass-through" that funnels money from wealthy donors to development and aid projects around the world, whose work includes providing AIDS drugs and poverty and hunger relief. (See pictures of Bill Clinton.)

From the start, the soft-spoken but respected Senator Lugar, in his mildest, most diplomatic way, stated his concern that the former President's fundraising abroad might create an impression of a conflict of interest. "Foreign governments and entities may perceive the Clinton Foundation as a means to gain favor with the Secretary of State," he said. Therefore, he suggested, "even well-intentioned foreign donations [to the Clinton Foundation] carry risk for United States foreign policy."

Lugar, 76, is a paragon of bipartisan collegiality, renowned for vigorously pursuing the Senate's mandate to oversee the workings of the Executive Branch, even when his own party has been in power. (He was one of the more openly skeptical Republican voices on Capitol Hill regarding the Bush Administration's plans for post-war Iraq, and was an early and influential voice in planning a troop drawdown.) Lugar raised his concerns while assuring Clinton of his enthusiastic support for her confirmation — though he publicly warned his old friend from the Senate of a potential pitfall on her path. "The only certain way to eliminate this risk going forward is for the Clinton Foundation to forswear new foreign contributions when Senator Clinton becomes Secretary of State," Lugar suggested.

Clinton answered by citing the lengthy memorandum of understanding negotiated between her staff and Obama's transition team last December as a condition for her being offered the job. That agreement specified that Bill Clinton would disclose all prior donors to the Clinton Foundation, provide an annual list of donors in the future and subject any proposed donations by foreign governments to a State Department ethics review.

Louisiana Republican Senator David Vitter chimed in with concerns about the Clinton Global Initiative, which he noted was not covered by the disclosure requirements of the memorandum of understanding, and could therefore become a place for anonymous fundraising. (Foundation spokesman Matt McKenna says the Global Initiative is, in fact, in the process of being incorporated separately from the charitable foundation.) Hillary Clinton pointed out that all sponsors of the initiative are publicly disclosed. When asked by Senator Robert Menendez of New Jersey whether she had committed to continuing to disclose such sponsors in the future, Clinton said, "That's correct." McKenna confirmed the initiative's intention to continue disclosing donors once it spins off the foundation. (See pictures of Bill Clinton campaigning with Hillary.)

Still, Lugar wanted to make sure that he had made his point. In an afternoon session, he returned to the dangers of any impression of a conflict of interest. "The foundation exists as a temptation to any foreign entity or government that believes it can curry favor through a donation," he said, and urged Clinton to adopt three additional measures: first, to disclose all donations over $50,000 immediately rather than in one year's time; second, to disclose all pledges over $50,000 by foreign individuals or businesses immediately; and third, to submit to the State Department ethics review all foreign individual and business donations over $50,000.

By the end of the hearings, even Senate Foreign Relations Committee chairman John Kerry was raising concerns about pledges for future donations. "There is a legitimate question, and I think, Senator, you'd agree that it's hard to distinguish between a donation currently made and — and acknowledged publicly — and a donation to be made in the future, a commitment made to but not acknowledged publicly." (See the members of Obama's White House.)

Clinton's response was that she wouldn't even know who was pledging money to her husband's foundation, but Lugar stuck to his guns and issued one final, powerful warning. "I am hopeful that as we go through the history of this, that people will not say, well, Senator Lugar and Senator Kerry and others were prescient; they saw the problems. And we'll get full credit, but that will not be helpful to our foreign policy, to you, your husband and the foundation. And this is why I plea for you really to give even more consideration. It need not be a decision made today, because I appreciate the negotiations have been sizable ... But this seems to me to be so important at the outset, and this is why I've dwelled upon it, trying your patience and that of the committee, because I think it is very important, and I think you understand that."

Clinton's approval by the Foreign Relations Committee on Thursday morning is all but guaranteed. But Senator Lugar has laid down a marker over the potential for conflict-of-interest questions surrounding foreign donations to Bill Clinton's charitable endeavors. And if it turns out that Senator Lugar saw trouble before it arrived, it won't have been the first time.

See pictures of Hillary Clinton's last days on the campaign trail.

See pictures of Hillary Clinton meeting Michelle Obama.