Yves here. While I very much like this post, IMHO Gaius should have led with the fact “the Hillary Victory Fund, a PAC jointly controlled by the Hillary Clinton campaign and the DNC” brazenly violates campaign finance rules. The noise about Sanders not “helping” the Democrats by raising state-level funds looks like a clever diversionary tactic. As Gaius explains, the individual donation limit si $2,700, and most big Clinton donors were tapped out. But the state-leve funds PAC (and PAC are supposed to be independent of the campaign) allow individuals to launder money vastly larger amounts to the Hillary machine.
By Gaius Publius, a professional writer living on the West Coast of the United States and frequent contributor to DownWithTyranny, digby, Truthout, and Naked Capitalism. Follow him on Twitter @Gaius_Publius, Tumblr and Facebook. Originally published at at Down With Tyranny. GP article here.
According to Politico, of the $60 million raised by and for the Hillary Victory Fund, a PAC jointly controlled by the Hillary Clinton campaign and the DNC, less than 1% of the money raised ended up benefiting state Democratic parties.
Why does this matter? Because Clinton has been touting from day one, it seems, that she’s been raising money for the party as well as for herself, and the media, even after stories like this, by actor and activist Margot Kidder, started coming out, has been taking her at her word, allowing the assertion to go unchallenged, even when the facts were at hand.
I’ve been calling the Hillary Victory fund a “kickback scheme.” Others have called it money-laundering. Full explanation of how the transfers work is here.
Now Politico tells the tale, and includes some numbers to give you a sense of the scale of the operation and just how badly the state parties are getting screwed (my emphasis):
Clinton fundraising leaves little for state parties
The Democratic front-runner says she’s raising big checks to help state committees, but they’ve gotten to keep only 1 percent of the $60 million raised.
In the days before Hillary Clinton launched an unprecedented big-money fundraising vehicle with state parties last summer, she vowed “to rebuild our party from the ground up,” proclaiming “when our state parties are strong, we win. That’s what will happen.”
But less than 1 percent of the $61 million raised by that effort has stayed in the state parties’ coffers, according to a POLITICO analysis of the latest Federal Election Commission filings.
The venture, the Hillary Victory Fund, is a so-called joint fundraising committee comprised of Clinton’s presidential campaign, the Democratic National Committee and 32 state party committees. The set-up allows Clinton to solicit checks of $350,000 or more from her super-rich supporters at extravagant fundraisers including a dinner at George Clooney’s house and at a concert at Radio City Music Hall featuring Katy Perry and Elton John.
The victory fund has transferred $3.8 million to the state parties, but almost all of that cash ($3.3 million, or 88 percent) was quickly transferred to the DNC, usually within a day or two, by the Clinton staffer who controls the committee, POLITICO’s analysis of the FEC records found.
By contrast, the victory fund has transferred $15.4 million to Clinton’s campaign and $5.7 million to the DNC, which will work closely with Clinton’s campaign if and when she becomes the party’s nominee. And most of the $23.3 million spent directly by the victory fund has gone towards expenses that appear to have directly benefited Clinton’s campaign, including $2.8 million for “salary and overhead” and $8.6 million for web advertising that mostly looks indistinguishable from Clinton campaign ads and that has helped Clinton build a network of small donors who will be critical in a general election expected to cost each side well in excess of $1 billion.
First, note the numbers. The scheme allowed each Clinton donor to circumvent limits on contributions to Clinton herself by donating also the Hillary Victory Fund (HVF), twice in fact, once in 2015 and again in 2016. Kidder explains that
a single donor, by giving 10,000 dollars a year to each signatory state could legally give an extra $330,000 a year for two years to the Hillary Victory Fund. For each donor, this raised their individual legal cap on the Presidential campaign to $660,000 if given in both 2015 and 2016. And to one million, three hundred and 20 thousand dollars if an equal amount were also donated in their spouse’s name.
From these large amounts of money being transferred from state coffers to the Hillary Victory Fund in Washington, the Clinton campaign got the first $2,700, the DNC was to get the next $33,400, and the remainder was to be split among the 33 signatory states. With this scheme, the Hillary Victory Fund raised over $26 million for the Clinton Campaign by the end of 2015.
But it never ended up working that way, and to all appearances, by design. As Politico explains above, the states almost immediately transferred nearly 100% — 88%, to be exact — of their portion back to the DNC.
Those George Clooney Fundraisers
A side note about the numbers. The original stories on HVF, the joint fundraising PAC, had 33 states involved. The above story (Politico) has just 32 states involved, implying that one state dropped out. No problem with that, and in fact it makes the George Clooney fundraiser numbers make sense.
Politico again, but a different story:
It will cost more than four times the average income in San Francisco to have dinner next to Hillary Clinton and the Clooneys there next month.
For two seats at the head table with Clinton, George Clooney and his wife, attorney Amal Clooney, at an April 15 fundraiser, a couple must contribute or raise a whopping $353,400 — a huge ticket price for a hard-dollar fundraiser….
On April 16, Clinton and the Clooneys will reunite at the Clooney Los Angeles mansion, where tickets cost $33,400 per person to dine at the table with one of Hollywood’s most glamorous couples.
As the story makes clear, the fundraisers are for the Hillary Victory Fund. For the second fundraiser, $33,400 is the amount that can be raised per individual, twice that per couple, “for the DNC” (allegedly) as part of an HVF donation. For the first fundraiser, $353,400 (an odd amount, right?) is the sum of $33,400 (“for the DNC”) plus $320,000, or $10,000 each for 32 state parties (who again, transfer back almost all of the money they “receive”).
Hillary Victory Fund in the Spotlight, Finally
Some have seen this as a problem for quite a while. As the original Politico story notes:
The arrangement has sparked concerns among campaign finance watchdogs and allies of Clinton’s Democratic rival Bernie Sanders. They see it as a circumvention of campaign contribution limits by a national party apparatus intent on doing whatever it takes to help Clinton defeat Sanders during the party’s primary, and then win the White House.
In other words, “money laundering” (Cory Doctorow’s term, quoted here) or, as I’ve been calling it, a kickback scheme.
What’s notable is that this is being noticed. Now even Rachel Maddow may have to acknowledge, the next time Clinton says to Maddow’s face that she’s “raising millions for the states and down-ticket races” (my paraphrase), that maybe a follow-up question is required. After all, this isn’t just Sanders campaign manager Jeff Weaver, or writers like Cory Doctorow and Margot Kidder, talking. This is Politico.
So consider for a moment, at the very point in this campaign that…
- Clinton pivots to the general election and attacks Trump more than Sanders, and
- Trump pivots to the general election and rolls out “crooked Hillary”
… Politico rolls out a “crooked Hillary (even if it’s legal)” story of its own. Politico legitimizes Trump’s attack. Game on.
Takeaways: First, the media won’t be as kind to Clinton in the general election as it was in the primary. I know, the primary’s still going on, but only in fact, not in the world of the media.
Second, as many including myself have noted, the free ride Clinton has been given by the press, including CNN and MSNBC (a network some in frustration have started calling “MSHRC”) — that free ride has allowed Clinton to operate in an atmosphere of never have been called out, of never having to clean up her act.
That free ride is ending, and Politico is the outlet that’s ending it. (Please do read the whole Politico piece; there much more dynamite in it than I can quote. If you can, go through it to the end.)
The Democratic Party Responds
Two final points, both from the article at the top of this piece. First, this isn’t a fake-leak story, as in, “People are pretending to be talking without permission so those who gave their permission can get their message out.” This story relies on real leaks, as in, “People who are talking to us are afraid of the price they’ll pay if we use their names.”
In this case, the leaks are coming from the state parties who are getting screwed:
But it is perhaps more notable that the arrangement has prompted concerns among some participating state party officials and their allies. They grumble privately that Clinton is merely using them to subsidize her own operation, while her allies overstate her support for their parties and knock Sanders for not doing enough to help the party.
“It’s a one-sided benefit,” said an official with one participating state party. The official, like those with several other state parties, declined to talk about the arrangement on the record for fear of drawing the ire of the DNC and the Clinton campaign.
Second, those state officials are being schooled by the DNC in the correct method of response:
In fact, the DNC, which has pushed back aggressively on charges that it is boosting Clinton at the expense of other Democrats, has advised state party officials on how to answer media inquiries about the arrangement, multiple sources familiar with the interactions told POLITICO.
“The DNC has given us some guidance on what they’re saying, but it’s not clear what we should be saying,” said the official. “I don’t think anyone wants to get crosswise with the national party because we do need their resources. But everyone who entered into these agreements was doing it because they were asked to, not because there are immediately clear benefits.”
The states didn’t come up with this scheme, Clinton and the DNC did. And now it’s all coming out. Will it come out on CNN (and “MSHRC”) as well? That’s the next piece to watch for, now that Politico has given its permission and blessing.
And yes, you can bet this will be grist for the Trump machine’s mill.
Bad Judgment, Hubris or Never Saw the Sanders Movement Coming?
A thought from me. Clinton seems to be fraught with errors of her own making. Why on earth did she make those speeches after leaving the State Department, knowing that she would run, or at least, that running was one of the likely choices? Why do it? Greed? Bad judgement? Hubris? Or just the assumption that no one would call it out?
The same here, with this Hillary Victory Fund deception. Did Clinton and Wasserman Schultz never think this would be called out? Or did they think it would just be part of the background noise for most voters?
Or maybe she never saw coming a campaign that would say so clearly what only the whole country knows, but what would never be even whispered aloud by her bipartisan friends and the media. That the entire system is corrupt. That it needs taking down.
If no one speaks for the people, nothing will get publicly said. Sanders speaks for the people in the public arena for the first time in a generation. And no one in Clinton’s position perhaps, saw that coming, or figured out what an existential threat it would become.
Well, that existential threat is here, and it’s not going away. Bummer that, for some.