April 18:
Bernie Sanders’ presidential campaign on Monday accused Democratic front-runner Hillary Clinton’s presidential campaign of possibly violating campaign finance laws through its joint fundraising agreement with the Democratic National Committee.
Brad Deutsch, the lawyer for the Sanders campaign, wrote an open letter to DNC chairwoman Debbie Wasserman Schultz arguing that the Clinton campaign’s Hillary Victory Fund, the joint account between the campaign and various Democratic Party committees, “skirts legal limits on federal campaign donations.” The fund is made up of the Clinton campaign, 32 state Democratic committees, and the DNC.
“The Hillary Victory Fund has reported receiving several individual contributions in amounts as high as $354,400 or more, which is over 130 times the $2,700 limit that applies for contributions to Secretary Clinton’s campaign,” the letter reads. “Bernie 2016 is particularly concerned that these extremely large-dollar individual contributions have been used by the Hillary Victory Fund to pay for more than $7.8 million in direct mail efforts and over $8.6 million in online advertising, both of which appear to benefit only HFA by generating low-dollar contributions that flow only to HFA, rather than to the DNC or any of the participating state party committees.”
April 19:
“It clearly goes against what was intended for the joint fundraising committees,” said Larry Noble, the general counsel of the Campaign Legal Center, who served for 13 years as general counsel at the Federal Election Commission.
Looking at one example of a joint fundraising appeal, Noble remarked, “This is clearly a solicitation for Hillary Clinton,” and not in the way joint fundraising committees were intended to be used. …
The Clinton campaign vigorously denied any wrongdoing, blaming Team Sanders’ attack as the stratagem of a floundering effort in New York and elsewhere.
Today:
Leaked emails show the Democratic National Committee scrambled this spring to conceal the details of a joint fundraising arrangement with Hillary Clinton that funneled money through state Democratic parties.
But during the three-month period when the DNC was working to spin the situation, state parties kept less than one half of one percent of the $82 million raised through the arrangement — validating concerns raised by campaign finance watchdogs, state party allies and Bernie Sanders supporters. …
The emails show the officials agreeing to withhold information from reporters about the Hillary Victory Fund’s allocation formula, working to align their stories about when — or if — the DNC had begun funding coordinated campaign committees with the states. They also show one official blaming Sanders for putting the DNC between “a real rock vs hard place” by forcing “a fight in the media with the party bosses over big money fundraising.”
The nerve!
In the most bizarre and darkly comic moment, DNC Communications Director Luis Miranda emails his colleagues about which local Democratic official to put on Morning Joe to rebut the story.
Miranda asks DNC Deputy Policy Director for State Party Programs Maureen Garde, then-DNC National Political Director Raul Alvillar, and DNC CEO Amy Dacey if they should put Indiana State Chair John Zody on the show.
But Miranda had a problem. The Vogel-Arnsdorf story had quoted a state official and a party operative who were pissed about their disappearing money.
Since those complaining were unnamed, they could be anyone. Even Zody! In which case, putting him on TV might not be a good idea.
Miranda, anxious to know if Zody is “in a good place” on the issue, writes (emphasis mine):
“From: Miranda, Luis
Sent: Monday, May 02, 2016 4:33 PM
To: Maureen Garde; Alvillar, Raul; Dacey, Amy
Subject: FW: Can we use John Zody for TV tomorrow?“Do we know if the Indiana State Chair is in a good place on the Victory Fund before we book them? Any concerns with helping them get on air? Given the Sanders claim of money laundering I don’t want to help book if they’re one of the parties that are complaining off the record.”
To which Alvillar responds:
“I just talked to him last week. He didn’t mention anything to me. Let us check really quick.”
What this exchange shows is that the DNC officials, hilariously, didn’t know which local chiefs they’d screwed to the point of off-the-record revolt with their Victory Fund maneuvers.
http://www.rollingstone.com/politics/features/dnc-leak-shows-mechanics-of-a-slanted-campaign-w430814
That’s our Hillary – making friends wherever she goes.
As was the case with DNC officials teaming up to look for a negative “narrative” about how Bernie Sanders “never got his act together,” and pondering the possibility of a negative story about his religion, the DNC actively searched for a negative angle on the Sanders reaction to the Politico piece within hours after its release. They focused on the use of the term “money laundering.”
In fact, the use of the term first came from Democratic Party state fundraising sources in the Politico story.
As Vogel and Arnsdorf wrote, “[state fundraisers] worry that participating states… could see very little return investment from the DNC or Clinton’s campaign, and are essentially acting as money laundering conduits for them.”
These are loyal, party-line, grunt-working Democrats. And their judgment was: money laundering.
What does it all mean? If you’re a Clinton fan, probably nothing.
To anyone else, it shows that the primary season was very far from a fair fight. The Sanders camp was forced to fund all of its own operations, while the Clinton campaign could essentially use the entire Democratic Party structure as adjunct staff. The DNC not only wasn’t neutral, but helped with oppo research against Sanders and media crisis management.
Well, we need to look forward, not backward – as Obama likes to say when it comes to prosecuting torture. Bernie’s day is over and Hillary carries his endorsement into a bright future.
A future, we can be certain, filled with more sleaze, more claims of “technically legal”, debates over what “is” means, and everything we’ve come to expect from a political dynasty with the ethics of a hyena.
What does it all mean? If you’re a Clinton fan, probably nothing.
Technically, and I scrolled through HVF and state party FEC filings, the “money laundering” operation was perfectly legal. All the i’s dotted and t’s crossed. (The states didn’t follow the exact same reporting procedures, but that’s merely a technical matter that can be cleaned up later, although it did make reading and comparing the reports more complicated).
Sure the state parties didn’t get to keep much of that money, but they weren’t going to get that money anyway.
It didn’t increase the amount of money that individual donors and other donors could contribute to the HRC campaign, DNC, or the state parties.
Running funds through state parties didn’t just look hinky, but appeared to be incompetent. Incompetent first because it increased the odds that someone would publicly disclose the in-and-out from the HVF-state-DNC which on its face looks hinky. Second the distributions from HVF didn’t maximize what could have been collected for HVF, DNC, and the state parties in this election cycle.
It was more like, “hey big donor, give the HVF one jumbo check and save yourself the bother of having to write thirty+ checks.
Where HVF screwed the state parties was in delaying the distributions to the states. Hoarding the cash at HVF. Doing that reduced the allowable amount a state party could receive from any HVF big money donor by 50% and if it had to be passed on to the DNC down to zero.
An example may be helpful to understanding that. Say big money donor wants to max out on the HVF partner funds and do it with a two donations to HVF.
That breaks down to:
HRC: $2,700 (primary) $2,700 (general)
DNC: $33,400 (2015) $33,400 (2016)
30 state parties: each $10,000 (2015) and $10,000 (2016)
With state parties serving as transfer agents, the DNC could have received a total of $333,400 in 2015 that had originated from a single donor. I found no instances where that had been done. Possibly erring on the side of caution not to raise too many eyebrows (while the reports weren’t long enough to exceed the ability of an individual snoop like me to read and piece together).
Big money donor (BMD) hands over $336,400 in 2015 and pledges a like amount for 2016. The funds that could go to HRC were transferred quickly. (This is conceptual because BMDs had generally maxxed out to HRC before the HVF was created.) (Not that timing was critical in how fast they got from HVF to HRC. In most instances from a BMD donation, instead of transferring the remainder ($33,400 DNC and $10,000 to each of the state parties they doled out smaller amounts to those entities (BMD wouldn’t be aware of this). With the roundabout, the DNC may have received it’s 2015 full fare share of $33,400, sometime more and sometimes less. (If there was some SOP for doling out the funds, it was apparent to me from the filings. Seemed more like highly discretionary decisions.)
The incompetence was in not doling out all the funds in 2015. So, take state A, it received a distribution from BMD’s 2015 contribution in 2016 after the 2015 books and FEC filings were closed. Thus, it couldn’t receive any money from BMD’s 2016 contribution. No big deal (again this wasn’t money they were likely to see anyway), but it did reduce by $10,000 the combined amounts that State A/DNC were supposed to have received in this election cycle from a BMD.
The real scam (not that the FEC or HRC supporters give a damn) is that the HVF was absorbing HRC campaign costs. Fundraising, administrative, and other costs. What got lumped into HVF administration costs were HRC staff costs.
For Bernie’s campaign, the purchase of a t-shirt was recorded as a donation and the costs of the item, including shipping, appeared as campaign costs.
For HRC, the purchase price also recorded as a donation. The cost for the item remained in the HVF books. While this isn’t a huge component of campaign costs, it does run into millions of dollars. Had HVF distributed BMDs funds in accordance with the advertising, it wouldn’t have had the cash to cover the merchandise sideline.
As noted in the above article, small donor fundraising by HVF looked like what the HRC campaign sent. Again the donations hit the HRC coffers without any associated costs.
These two aspects of the HVF are illegal. Only hard money can be used in this way. From a public information perspective, it under-reported the HRC campaign costs and these costs were paid for with soft money. IOW by big money donors far in excess of the legally allowed contributions.
Just wanted to add a note that Matt Taibbi’s article should be read. He does a very nice job of demonstrating through the DNC emails on the questions about the HVF that there was no separation between the DNC-HVF-HRC campaign. They have been all of one piece. The DNC not just favoring HRC but being part of the HRC campaign itself.
Such an arrangement does come into existence after the national convention and before then if the primary weren’t contested or once a candidate has secured the nomination and the other candidates have dropped out or have so few delegates that she/he is an asterisk.