The former president agreed to accept a lifetime-achievement award at a famed fashion model’s 2014 charity event only after a $500,000 contribution was offered to the Bill, Hillary & Chelsea Clinton Foundation.
To commemorate the 10th anniversary of the 2004 Indian Ocean tsunami, Petra Nemcova, a Czech model who survived the disaster by clinging to a palm tree, decided to pull out all the stops for the annual fundraiser of her school-building charity, the Happy Hearts Fund.
She booked a luxury restaurant in Manhattan that greeted guests with Bellini cocktails on silver trays. She flew in Sheryl Crow with her band and crew for a 20-minute set. She special-ordered heart-shape floral centerpieces, heart-shape chocolate parfaits, heart-shape tiramisu and, because orange is the charity’s color, an orange carpet rather than a red one. She imported a Swiss auctioneer and handed out orange rulers to serve as auction paddles, playfully threatening to use hers to spank the highest bidder for an Ibiza vacation.
The gala cost $363,413. But the real splurge? Bill Clinton.
The former president of the United States agreed to accept a lifetime-achievement award at the June 2014 event after Nemcova offered a $500,000 contribution to the Bill, Hillary & Chelsea Clinton Foundation. The donation, made late last year after the foundation sent the charity an invoice, amounted to almost one-quarter of the evening’s net proceeds, enough to build 10 preschools in Indonesia.
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Happy Hearts’ former executive director believes the transaction was a “quid pro quo,” which rerouted donations intended for a small charity with the concrete mission of rebuilding schools after natural disasters to a large foundation with a broader agenda and a budget 100 times bigger.
“The Clinton Foundation had rejected the Happy Hearts Fund invitation more than once, until there was a thinly veiled solicitation and then the offer of an honorarium,” said the former executive director, Sue Veres Royal, who held that position at the time of the gala and was dismissed a few weeks later amid conflicts over the gala and other issues.
Media officers for Nemcova and for the Clinton Foundation said Thursday that the foundation had not solicited the donation and that the money would be used for projects in Haiti, as yet undetermined.
The Happy Hearts Fund and the Clinton Foundation “have a shared goal of providing meaningful help to Haiti,” the school charity’s spokeswoman said. “We believe that we can create the most impactful change by working together.”
Built on prestige
The episode provides a window into the way the Clinton Foundation relies on the prestige of Clinton, and his wife, Hillary Rodham Clinton, to amass donors large and small, offering the prospect, as described in the foundation’s annual report, of lucrative global connections and participation in a worldwide mission to “unlock human potential” through “the power of creative collaboration.”
Similarly, Nemcova, like other celebrity philanthropists, uses her fame to promote her charity — which has financed more than 110 schools, mostly kindergartens — just as she uses Happy Hearts to position herself as a model humanitarian.
“This is primarily a small but telling example of the way the Clintons operate,” said Doug White, who directs the master’s program in fundraising management at Columbia University. “The model has responsibility; she paid a high price for a feel-good moment with Bill Clinton. But he was riding the back of this small charity for what? A half-million bucks? I find it — what would be the word? — distasteful.”
In her letter of invitation to Bill Clinton, Nemcova, then chairwoman of her charity’s board, said she wanted to show her appreciation for his “inspirational leadership” after disasters.
“My gratitude to you is so strong that should you accept, we will schedule our event commemorating the 10th anniversary around your schedule,” she wrote, speaking of their shared dedication to the survivors of the tsunami and the 2010 earthquake in Haiti.
When the tsunami struck in December 2004, Nemcova, who had been featured on the cover of the Sports Illustrated swimsuit issue the previous year, was vacationing in Thailand with her boyfriend, fashion photographer Simon Atlee. They were swept from their beach cottage and separated in the turbulent waters; Atlee died.
Nemcova, her pelvis shattered, held fast to a tree for hours until she was rescued, listening impotently to the cries of children, she has said, which later motivated her to found her child-centric charity.
Happy Hearts rebuilt two schools in Thailand while Bill Clinton was the United Nations’ envoy for tsunami relief and reconstruction. Most of the charity’s rebuilding has been in Indonesia after the earthquakes of 2006 and 2009.
After the 2010 earthquake in Haiti, Nemcova turned her attention to that small island nation, where Bill Clinton and Hillary Rodham Clinton, as secretary of state, played outsize roles in the earthquake-relief effort and the more problem-filled reconstruction.
In fall 2011, many players in Haiti’s rebuilding effort, including Nemcova, attended the Clinton Global Initiative’s membership meeting in Manhattan. Members, who must be invited, pay $20,000 in annual dues, largely for the yearly gatherings, where charity founders and entrepreneurs get to network with world leaders, corporate executives and wealthy donors.
At the meeting, Nemcova signed a memorandum of understanding with the president of the Inter-American Development Bank to finance schools in Haiti. The development bank has also donated to the Clinton Foundation and it partnered with Hillary Rodham Clinton’s State Department after the earthquake to create an industrial park in northern Haiti.
Almost four years after Happy Hearts and the development bank made their commitment, they have yet to complete a single school, partly because of problems finding suitable land. Five schools are under construction.
Happy Hearts collaborated more expeditiously in Haiti with the Digicel Foundation, whose founder, Irish billionaire Denis O’Brien, is a multimillion-dollar supporter of the Clinton Foundation and whose parent telecommunications company benefited from grants from Hillary Rodham Clinton’s State Department.
Digicel also made a commitment at the 2011 meeting to build schools. It has built 150 schools there in the past seven years; Happy Hearts has built seven, six of them joint or side-by-side ventures with Digicel.
One of those schools was featured in the Clinton Foundation’s most recent annual report as “built through a Clinton Global Initiative Commitment to Action.” The Clinton Foundation’s sole direct contribution to the school was a grant for an Earth Day celebration and tree-planting activity.
Not just for charity?
Through the years, Nemcova, 35, has blended her personal and philanthropic lives; her sister replaced Veres Royal as executive director of Happy Hearts.
In 2011, when she appeared as a contestant on ABC’s “Dancing With the Stars,” her survival story and charity received ample, positive attention. She brought on Clinique and Chopard as sponsors of the charity, but also accepted personal fees to model their products.
“Ms. Nemcova has a long career as a model in fashion industry for 16 years and has longstanding relationships with many brands,” her charity’s spokeswoman said. “Happy Hearts Fund is grateful for Chopard’s and Clinique’s support.”
At the 2014 gala, Chopard, a Swiss jeweler that was dedicating partial proceeds from a heart-shape bracelet to the charity, set up showcases in the cocktail area, Veres Royal said.
“They were peddling exorbitant jewelry at a gala that was supposed to focus on children who have lost their belongings, homes and often friends and family members,” she said. “It was inappropriate and tacky. Too many people at that event were looking after their own interests first.”
Happy Hearts Fund first asked Bill Clinton to be its honoree in 2011. Trying again in 2013, Nemcova sent her first formal letter of invitation in July, asking Clinton to be the primary award recipient at a Happy Hearts gala on Nov. 4, 2013, celebrating Indonesia.
Clinton’s scheduler replied with a cordial rejection.
Nemcova subsequently met with officers at the Clinton Foundation, Veres Royal said. Afterward, she said: “Petra called me and said we have to include an honorarium for him, that they don’t look at these things unless money is offered, and it has to be $500,000.”
The invitation letter was revised and sent again at the end of August. It moved the gala to 2014, offered to work around Clinton’s availability, dropped the focus on Indonesia, shifted it to Haiti and proposed the donation.
When charities select an honoree for their fundraising events, they generally expect the award recipient will help them raise money by attracting new donors. But the Happy Hearts Fund raised less money at the gala featuring Bill Clinton than it did at its previous one.
Further, it is extremely rare for honorees, or their foundations, to be paid from a gala’s proceeds, charity experts said.
In the charity-gala world, it is considered unacceptable to spend more than one-third of gross proceeds on costs, and better to spend considerably less. If the donation to the Clinton Foundation were counted as a cost, Happy Hearts would have spent 34 percent of its announced $2.5 million in proceeds on its gala. Its actual expenses were in line with what other charities spend on such events.