Is Clinton Really Supporting Down Ballot Candidates? Or Just Laundering Campaign Donations?

I’ll preface this with a disclaimer: there are good and bad reasons to favor either Clinton or Sanders. What I do not accept are bullshit arguments, even when made by Very Serious Pundits [cough Krugman cough].

One of those bullshit arguments is that Clinton is raising massive amounts of money for the state Democratic parties through her Hillary Clinton Victory Fund (‘HCVF’). Since this will get a little complex, I’ll give you the punchline first: the HCVF is a way for contributors to give hundreds of thousands of dollars to Clinton’s campaign, while skirting campaign finance law–in fact, many state parties are seeing no money from this at all.

Surprisingly, this has been known since August, yet there has been virtually no coverage of it–instead, the story line has been ‘Clinton raises funds for Democrats, while Sanders doesn’t’ (sadly, Paul Krugman recently beclowned himself making this argument).

So here’s how it works. From the Washington Post (boldface mine):

The joint committee that was formed, called the Hillary Victory Fund, ended up raising nearly $27 million by the end of 2015, thanks to six-figure donations from longtime Clinton allies and a New York fundraiser headlined by the singer Sting.

So far, the state parties have served only as a pass-through for their share of the funds. Campaign finance records show that nearly $2 million in donations to the fund initially routed last year to individual state party accounts was immediately transferred to the DNC, which is laboring to pay off millions of dollars in debt.

Now you know why Wasserman-Schultz, the failed head of the Democratic National Committee, is in the tank for Clinton. Anyway…

“I’ve never seen anything like this,” said Lawrence Noble, a former general counsel of the Federal Election Commission (FEC) who is now with the nonpartisan Campaign Legal Center. “Joint victory funds are not intended to be separate operating committees that just support a single candidate. But they appear to be turning the traditional notion of a joint committee into a Hillary fundraising committee.”

…However, the national parties have traditionally waited to have a presumptive White House nominee before launching such a vehicle. It was not until June 2008 that Barack Obama and the DNC created one….

A few state parties were pretty suspicious of this, because there was no way you could see it as anything but a tacit endorsement of Hillary Clinton,” said one party leader whose state declined to sign on to the victory fund and spoke on the condition of anonymity to describe private conversations.

Other state officials were concerned that the fund would undercut their ability to raise funds for key races from home-state contributors.

Bloomberg describes the mechanism (boldface mine):

Under the agreements, the first $2,700 of a contribution goes straight to Clinton’s campaign, the next $33,400 to the Democratic National Committee, and the remainder is split evenly across the 33 often cash-strapped state committees. Unlike super-PAC donations, the money can be spent to directly support her campaign on anything from get-out-the-vote efforts to TV ads.

Clinton and her campaign raise the money, spend some of it to raise more, and decide when to distribute the remainder. The only other way to make such large contributions is through outside groups, such as super-PACs, which can take unlimited donations but can’t directly coordinate with the candidate.

This is money the candidate controls,” said Sheila Krumholz, executive director of the Center for Responsive Politics, a group that tracks campaign finance. “This is money used to inspire support in the states.”

Oh, that money going to the state parties? It’s going there, alright, but it’s not staying there. Guess where it’s going?

The agreement with the Hillary Victory Fund and the DNC could solve some of the Montana State Democratic Party’s financial problems while simultaneously funding several state and federal candidates. But the scheme would only make sense as a benefit to the parties involved if the money raised actually stayed in the states that received the initial checks. This did not happen.

The Alaska Democratic party, in its end of the year filing with the FEC, said it raised $43,500 from the Hillary Victory Fund with 10,000.00 dollar donations from Clinton friends and billionaires, including hedge fund manage S Donald Sussman, and Hyatt Hotel heir JB Pritzker. ( two of the several $10,000 donors to the Montana State Democratic Party) . But in the same report it said it transferred the same amount of money, $43,500 back to the DNC – . a technically legal move that effectively obliterates federal limits on donations to the national committee.

“It just becomes a way to funnel more to the DNC to support the Clinton Campaign”, said Paul S. Ryan, deputy executive director of the Campaign Legal Centre, which advocates for campaign finance reform. “It’s effectively Hillary Clinton’s team soliciting Hillary Clinton’s supporters for much bigger checks than they can give to the campaign.”

The same thing happened with the Maine State Democratic Party with many of the same billionaire donors. Maine attracted many of Clinton’s biggest donors. But the contributions didn’t stay in Maine either, or in any of the other state democratic parties to which Hillary Victory Fund donations have been funneled. In October and November two transfers totaling $39,000 from the Hillary Victory Fund to the Maine Democratic party sat for less than 48 hours before the same amounts were transferred to the DNC in Washington.

The Montana State Democratic party received $43,500 dollars from the Hillary Victory Fund on November 2, 2015. Yet on that same day it transferred $43,500 back to the Democratic National Committee in Washington. And on December 1, 2015 it received another $20,600 from the Hillary Victory fund. And on the same day the Montana State Democratic Party sent that exact same amount, $20,600, back to the DNC in Washington as well, an entity that has not bothered to disguise its preference for a Hillary Clinton candidacy over that of a Bernie Sanders one.

By November 2015, 22 of the state parties linked to the Hillary Victory Fund have received $938,500 from the fund and sent the same amount back to the DNC. There is no limit to amounts of money transferred between state and national parties and PACS or Funds.

(Obama had a similar fund in 2008, but not until he had already won enough delegates to be sure he would be the nominee.)

This is just a way to raise huge amounts of money (up to $355,000) for the Clinton campaign. It does nothing, absolutely nothing to help state parties. Worse, it is overt support for one candidate during a primary by the party–and remember, this was happening while O’Malley, a long-time Democrat ‘in good standing’ was also in the race.

Enough with the canard that Clinton is helping the state parties; she’s helping herself. And some Very Serious Pundits, whether junior or senior, need to stop beclowning themselves.

Of course, if Sanders does win the nomination (and I don’t think he will), the irony of that big pile of DNC cash given by wealthy donors with the understanding it would help Clinton being used by Sanders is awesome.

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2 Responses to Is Clinton Really Supporting Down Ballot Candidates? Or Just Laundering Campaign Donations?

  1. Pingback: Is The Hillary Victory Fund A Fraud? | The Mahablog

  2. heater says:

    I’m not sure I get your reasoning. The money gets transferred to the states, and then to the DNC. That seems a bit odd, maybe unethical, though not illegal. But how does this imply that the money is going back to Clinton? That may well be true, but is there any evidence for it? It looks to me like Clinton is in effect raising large sums of money for the DNC. Why is that a bad thing to do? She’s a democrat, after all.

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