Former President Bill Clinton stepped down from his position at Laureate International Universities, part of Laureate Education Inc., on Friday. His five-year term as "honorary chancellor," the company and Clinton's staff said, had expired. But Peter Schweizer, the conservative author of a forthcoming book examining the Clintons’ financial dealings, suggests a different explanation: Clinton actually resigned in order to avoid a wave of negative publicity.

Bloomberg Politics has obtained a chapter of the book describing what Schweizer presents as a “troubling” co-mingling of official State Department business with the private financial affairs of Bill Clinton and a nonprofit run by Laureate’s chairman, Douglas Becker. 

Laureate, which runs for-profit colleges, hired Clinton just as the Obama administration began drafting tougher regulations for federal financial aid that goes to students who attend for-profit colleges. Around the same time, the Senate committee on Health, Education, Labor and Pensions launched an investigation into the industry. In his book, Clinton Cash: The Untold Story of How and Why Foreign Governments and Businesses Helped Make Bill and Hillary Rich, Schweizer writes that after Bill Clinton accepted the position at Laureate in 2010 in exchange for unspecified payment, his wife “made Laureate part of her State Department Global Partnership.” The State Department subsequently provided tens of millions of dollars to a nonprofit chaired by Becker, the International Youth Foundation.

Former President Bill Clinton speaks to students at Laureate’s Universidad Latina in Costa Rica.
Former President Bill Clinton speaks to students at Laureate’s Universidad Latina in Costa Rica.
Photograph: Laureate International Universities

Citing the foundation’s tax filings, Schweizer writes that while IYF had received government grants (mainly from the U.S. Agency for International Development) as far back as 2001, they “exploded since Bill became chancellor of Laureate,” accounting for the vast majority of the nonprofit’s revenue. In 2010, “government grants accounted for $23 million of its revenue, compared to $5.4 million from other sources. It received $21 million in 2011 and $23 million in 2012.” The link between International Youth Foundation and Laureate has not been previously reported, he said.

The Clinton campaign disputed Schweizer’s characterization. "This is yet another false allegation in a book that is fast being debunked," said Brian Fallon, a campaign spokesman. "The International Youth Foundation was funded by the Bush administration, well before Hillary Clinton became Secretary of State. In fact, the group's USAID funding actually went down in the year that she arrived at the State Department, not up."

A Bloomberg examination of IYF’s public filings show that in 2009, the year before Bill Clinton joined Laureate, the nonprofit received 11 grants worth $9 million from the State Department or the affiliated USAID. In 2010, the group received 14 grants worth $15.1 million. In 2011, 13 grants added up to $14.6 million. The following year, those numbers jumped: IYF received 21 grants worth $25.5 million, including a direct grant from the State Department.

Laureate has declined to say how much it has paid the former president. Hillary Clinton’s financial disclosure forms in 2012 revealed only that her husband received nonemployee compensation of more than $1,000 from the company that year. The Clinton Foundation’s donor disclosures showed that Laureate cumulatively gave between $1 million and $5 million through 2014. In his book, Schweizer noted that Bill Clinton, during the period when his wife was secretary of state from 2009 to 2013, spoke at Laureate campuses in Honduras, Mexico City, Germany, Spain, Turkey, Malaysia, Brazil, Peru, and the United States. Schweizer wrote that “based on his typical fee scale,” the half dozen speaking events Clinton has done annually for Laureate “means perhaps $1 million per year.” He dubbed this blend of government service and private remuneration the “Clinton blur.” 

Laureate plays up its Clinton ties in a big way. Its homepage prominently features a photo of Clinton speaking this month at a new campus in Panama. Other pages detail Clinton's role at Laureate and the company’s relationship with the Clinton Global Initiative. The fact that Clinton only signed on for a five-year term was not publicly disclosed when his hire was announced in April 2010 or at any time before Friday.

In a statement, Laureate spokesman Matthew Yale said, “The politics and motives of the author are obvious and his claims are baseless. We are proud of our association with President Clinton, who shares our commitment to helping young people change their lives through education. We never needed him to defend us, our results speak for themselves—for example the industry leading repayment rates for our students participating in the U.S. government loan program. Regarding the International Youth Foundation, this is an independent non-profit organization; not an affiliate of Laureate. Their contracts with the US government pre-date Secretary Clinton's arrival at the State Department.”

Also on Bloomberg Politics: The Definitive Hillary Clinton Scouting Report, by Mark Halperin and John Heilemann

Schweizer writes, “Isn’t it troubling that while Bill Clinton was being paid by a private corporation, that corporation was also benefiting from State Department actions? Isn’t it troubling that an affiliate of that corporation is also receiving tens of millions of dollars in taxpayer money? Isn’t it troubling that this seeming conflict of interest was not disclosed?”

Schweizer certainly seems to think so. And he takes the timing of Clinton’s abrupt resignation as a tacit acknowledgement that the former president does, too. “Curious timing to say the least,” Schweizer said in an e-mail, of Clinton’s decision to step down. “Perhaps when readers see pages 101-104 of ‘Clinton Cash’ they will understand why Bill Clinton resigned from Laureate on Friday.”

To the suggestion that Clinton quit because of the book, Fallon replied, “Lame.”

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