Michael Maiello's picture

    Financial Illiteracy and Bill Clinton's "Secret Company"

    The right wing is all agog about Bill Clinton's "secret" company called WJC LLC.  The "secret" company, which has twice incorporated itself with public documents naming Bill Clinton as its majority shareholder in two states (New York and Delaware), is not actually a secret company at all.

    It was a company in plain sight, like any number of private but incorporated entities in the United States.  I could, if I wanted and with very little work, form a corporation around my freelance writing.  Were I to do so, the primary benefit to me would by that people who hire me to write would make out a check to my corporation.  At the end of the year, I could then have a corporation write a check to me.  The corporation would not pay taxes on the money and could thus invest it in a tax advantaged way for the year.  I would then report the money paid to me as a distribution from my company, taxed as income but likely exempt for Social Security, Medicare and other taxes.

    Now, if you hated me, you would say that I was "funneling money" through my "secret corporation."  But I would, in fact, be doing exactly what your doctor or dentist does if they don't work for an HMO or hospital.

    WJC was not mentioned as an asset in Hillary Clinton's campaign finance reports because it did not distribute more than $1,000 in the period covered, which is the disclosure requirement.  It is a company in name only.  It has no assets, other than any undistributed financial holdings (that if never distributed could actually be very tax inefficient for Bill).  It owns no property it has no vehicles, it has no employees.

    A funny thing -- a friend of mine who is a graphic design consultant does work for the United Nations.  She had to incorporate to get the business because the U.N., or the part of it she deals with, would not engage an individual contractor as a sole proprietor.  They hire companies, not people.  WJC LLC was formed to collect payments for the former president's consulting work.  It's very possible that he consulted for entities that also preferred dealing with other corporations.

    More importantly, though, look at the initials LLC.  That's for "Limited Liability company." That's key for a guy who has been on the receiving end of litigation.  Anyone who hires Bill Clinton would have a contract not with Bill but will WJC LLC.  Were they to sue him for some reason, they would be able to claim only WJC LLC's assets.  Were the contract with Bill, somebody could sue him for his personal assets and those of his family.  This is also why your doctor doesn't just hold himself out as a sole proprietor.

    So what's been described as "secret," was not and what's been described as a "shell" is not as nefarious as it sounds and money has no more been funneled to WJC LLC than you funnel money to any company when you buy its products.  The phrase "pass through" is also used by journalists and commentators who don't seem to know much about business in order to make it seem like there's something untoward afoot.

    Bill Clinton owns a company. it is not secret or even novel. He would be a fool to do business any other way and nobody with assets to protect would conduct themselves otherwise unless under bad advice or willful ignorance.

    Which really means that I should incorporate. But that's another story.

    My real gripe here is with the mainstream press that has fed the right wing critics.  There was no story here.  They was no secret.  It's like when people claim that a public company's information is "hidden in the footnotes" of its public filings.  That information really isn't hidden.  It's in the footnotes.  You're supposed to read those.  You might even find something interesting!

    In this case, the Associated Press uncovered that Bill Clinton has a company named after his initials.  I'm not sure how that merited ink.  Ignorance of how businesses work is the only thing I can think of.



    Small businesses in this country are the building blocks for economic growth...Cutting red tape and knocking down bureaucratic hurdles makes it easier for small business to get off the ground, to grow and to succeed.

    --Scott Walker

    I'm reminded of a Roz Chast cartoon from the 90s in which her usual mddle aged female character is announcing accusingly  that she had been behind HIllary in the supermarket line and had seen her do something like not showing the check out clerk some incredibly minor  item like a newspaper (that wasn't it but it gives an indication of the triviality of the "issue").

    Pity I don't have a copy of it to scan. I smile just recollecting it. It does capture the banality of the right wing's endless assault on the Clintons.


    Thanks for the way self employed incorporate.  It has been a long time since I thought about a LLC.

    For twenty years the media has promoted petty and made up assaults on the Clinton Family. It used to play well getting eye balls to watch or read this dribble.  But dribble don't work so well anymore because people have gotten immune towards that and this is why their market is getting smaller. I had not even paid attention to the secret companies meme.  I skip right over it when reading the news on line. The Clinton's could have a dozen LLC's, 7 houses and a brothel, that would not interest me because I have too many real things in my life to concentrate on.   I know the media likes to make a mountain out of a mole hill when it comes to the Clintons. 

    I am putting this here because Moyers tells it like it is. Just incase some one is interested to read this.



    In other words, it's an LLC so that Hillary isn't on the hook for anything Bill does as WJC. Therefore, none of our business.


    Yep.  Also so that his entire fortune isn't on the hook, which is understandable.  I'm sure he plans to leave a huge grant to his Foundation as well as making sure Chelsea is well taken care of.  Anyone with his assets would be such a fool to leave them all exposed.

    She excused his infidelities! She's as bad as he is! And she killed Vince Foster 12 times!

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