Some confusion surrounds the story we broke last Friday on the criminal money laundering probe into both Starkey Hearing Technologies and the Starkey Hearing Foundation, and with the help of a late July investigation by Minnesota Public Radio, this article will attempt to explain what it means for the Starkey Hearing Foundation.
To clarify one point, although our law enforcement source confirmed the FBI’s probe into the Starkey corporate and foundation entities (“yeah, it’s a Big One“) they did not confirm either the IRS’ and/or the FDA’s involvement — They may indeed be involved, but we cannot confirm those two aspects.
The Starkey Hearing Foundation is another story entirely, especially since it has deep ties to the Clinton Foundation, which itself is on Charity Navigator’s “watch list.” According to this extensive investigative report by Minnesota Public Radio in late July of how the Starkey Foundation pays celebrities:
…Clinton’s Global Initiative, for example, received $1.6 million from the Starkey foundation between 2010 and 2013.
…To some, the efforts of the Starkey foundation amount to brilliant marketing, both helping people in need and getting Starkey hearing aids into emerging global markets. Others worry that the foundation obscures the relationship between it and the celebrities and between the foundation and its corporate partner, the privately owned for-profit Starkey Hearing Technologies.
In 2013, the most recent year for which data is available publicly, the foundation reported revenue of $33 million. Two-thirds of that was in the form of hearing aids provided by the company, the fifth-biggest hearing aid manufacturer in the world. The foundation donated those hearing aids to poor people around the world, often at highly visible “missions” featuring teams of celebrities like Clinton.
Most of the rest of the foundation’s revenue was raised at the annual gala, which brings in more than $8 million a year. That money pays for the international missions and also goes into the coffers of foundations favored by the celebrities.
Documents the Starkey foundation filed with the Internal Revenue Service between 2011 and 2013 show it gave $1.9 million to the George W. Bush Presidential Library, the George W. Bush Foundation and The Global Health Corps, founded by Bush’s two daughters.
The foundation also gave significant sums to charities tied to entertainers who performed at the gala and appeared on hearing aid missions.
Elton John, for example, performed at the gala in 2004 and 2009 and went on a foundation hearing aid mission to the Philippines in 2012. The foundation gave the Elton John AIDS Foundation $1.5 million between 2007 and 2012.
Other charities linked to Garth Brooks, Tony Bennett, Michael Bolton, Miley Cyrus and Jordin Sparks also received money from Starkey. They either performed or appeared at past gala events.
Charities linked to professional sports stars Willie Mays, Muhammad Ali, Magic Johnson, Larry Fitzgerald and Adrian Peterson also have received money from the foundation…
The article continues:
[Foundation president Richard] Brown said charities linked to George W. Bush and the Clinton Global Initiative (CGI) will continue to get funding because of commitments made in the past. He said the fee to be a member of CGI, which has helped deliver hearing services internationally, is $500,000 a year…
There is nothing illegal about the foundation’s approach to courting celebrities, but there is disagreement among nonprofit watchdogs about the practice.
Doug White, director of the master of science in fundraising management at Columbia University in New York, said the foundation should be more transparent about what it spends to put on the gala. After scanning Starkey’s charity forms and looking at the gala attendees, White said that, in particular, it should let people know how much celebrities charge to be a part of the mission.
“There’s a lot of buzz when it comes to being a celebrity,” White said. “Having Elton John come and speak and maybe sing a song or two. Having Bill Clinton, come, Oh my God, isn’t this wonderful? It’s so great, but you know at the end of the day everyone goes home and the question is, ‘Is the mission being furthered?’ I don’t see a lot of evidence of that.”
…The company values the hearing aids it provides the foundation at $250 each – a figure consistent with what German regulators reported it costs to make the device when they released a study of major hearing aid manufacturers in 2006. Several analysts say the company is eligible for taking a tax break on every device it donates to the foundation.
Let’s pause here and look at that $250 per aid figure Starkey Hearing takes on every donated device: We think the IRS would like to know how that figure was derived, as the tender price to Britain’s National Health Service (NHS) is about £63 per aid, which is about US$100.
- Clinton Global Initiative: $5.6 million (membership $4 million + $1.6 million in donations)
- Elton John AIDS Foundation: $1.5 million
- George W. Bush Foundation and George W. Bush Presidential Library: $1,250,000
- Teammates 4 Kids (co-founder: Garth Brooks): $785,000
- Global Health Corps (Barbara Bush and Jenna Bush Hager): $692,465
- Women’s Sports Foundation (Billie Jean King): $525,000
- Youth Services America/Get UR Good On (Miley Cyrus): $420,000
- Michael Bolton Charities: $350,000
- Virgin Unite USA (Richard Branson): $210,000
- Exploring the Arts (Tony Bennett): $141,000
- Goldie Hawn Institute: $132,500
The donations made by Starkey Hearing Foundation just to these entities alone is over $11.6 million. Since we’re also discussing the sleazy Clinton connection, note the $5.6 million figure paid to CGI does not include the two appearances of Bill at the biennial Starkey Expo trade show in Las Vegas. For more on this, see Does This Charity Shakedown By Bill Clinton Look Disturbingly Familiar? from June.
As we wrote last Friday, because of Austin’s extensive personal & business ties to team Clinton as we documented in June, the implications of the Starkey probe could be staggering: Is the Clinton Foundation itself under a secret FBI criminal investigation, and one of the subsidiary discoveries money laundering by the Austins? Or, is the converse true, that the Starkey probe triggered a probe into team Clinton? Currently, the FBI has custody of the CLINTONEMAIL.COM e-mail server as part of a criminal investigation into Hillary (the FBI only performs criminal, not civil investigations) and just last week recovered her work and personal e-mails, but it is worth noting the former Secretary of State and her team shared the same domain and server as the Clinton Global Foundation: What did the FBI uncover? Are the Clinton and Starkey probes independent, or more ominously, are they tied together?