By Lambert Strether of Corrente
Long-time Democratic operative Donna Brazile, interim chair of the Democratic National Committee (DNC) after Debbie Wasserman Schultz was defenestrated, has, like two other participants in the 2016 Presidential election and at least one set of observers, written a book, Hacked, and published a long excerpt from it four days ago, in Politico. Here is the key passage, in which Brazile paraphrases and quotes a conversation with Gary Gensler, former of Goldman Sachs and the CFTC, and then the chief financial officer of the Clinton campaign:
[Gensler] described the party as , which seemed to confirm the suspicions of the Bernie camp. The campaign had the DNC on life support, giving it money every month to meet its basic expenses, while the campaign was using the party as a fund-raising clearinghouse. Under FEC law, an individual can contribute a maximum of $2,700 directly to a presidential campaign. But the limits are much higher for contributions to state parties and a party’s national committee.
Individuals who had maxed out their $2,700 contribution limit to the campaign could write an additional check for $353,400 to —that figure represented $10,000 to each of the 32 states’ parties who were part of the Victory Fund agreement—$320,000—and $33,400 to the DNC. The money would be deposited in the states first, and transferred to the DNC shortly after that. Money in the battleground states usually stayed in that state, but all the other states funneled that money directly to the DNC, which quickly transferred the money to Brooklyn.
Yes, you read that right. Although the Hillary Victory Fund was billed as aiding the states, in fact the states were simply pass-throughs, and the money went to the Clinton campaign. (This is not news; Politico covered the Victory Fun in 2016: “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.”)
“Wait,” I said. “That victory fund was supposed to be for whoever was the nominee, and the state party races. You’re telling me that Hillary has been controlling it since before she got the nomination?”
Gary said the campaign had to do it or the party would collapse.
“That was the deal that Robby struck with Debbie,” he explained, referring to campaign manager Robby Mook. “It was to sustain the DNC. We sent the party nearly $20 million from September until the convention, and more to prepare for the election.”
After some research, Brazile finds a document (“the agreement”) that spells out what “fully under the control of Hillary’s campaign” meant operationally:
The agreement—signed by Amy Dacey, the former CEO of the DNC, and Robby Mook with a copy to [DNC lawyer] Marc Elias—specified that in exchange for raising money and investing in the DNC, Hillary would control the party’s finances, strategy, and all the money raised. Her campaign had the right of refusal of who would be the party communications director, and it would make final decisions on all the other staff. The DNC also was required to consult with the campaign about all other staffing, budgeting, data, analytics, and mailings.
I had been wondering why it was that I couldn’t write a press release without passing it by Brooklyn. Well, here was the answer.
(Importantly, Gensler has not disputed this account, of which, assuming he’s not vacationing Antarctica, he must have been aware of, given the media uproar. We can therefore assume its accurate). Note two aspects of this passage, which I’m quoting at such length to ensure we know what Brazile actually charged. I’ve helpfully underlined them: (1) Brazile leads with the money; that is, the Clinton Victory Fund, and (2) Brazile describes the DNC as “fully under the control” of the Clinton campaign.
Predictably, an enormous controversy erupted, much of it over the weekend just passed, but I’m not going to do a blow-by-blow of the talking points. (Glenn Greenwald provides an excellent media critique in “Four Viral Claims Spread by Journalists on Twitter in the Last Week Alone That Are False“; all four have to do with this controversy.) I think the following three quotes are key, the first two being oft-repeated talking points by Clinton loyalists:
“The joint fundraising agreements were except for the treasurer, and our understanding was that the DNC offered all of the presidential campaigns the opportunity to set up a JFA and work with the DNC to coordinate on how those funds were used to best prepare for the general election.”
Question: Were the agreements “the same” for each campaign? (Perez focuses only on the JFA, but that omits a separate Memorandum of Understanding (MOU) between the DNC and the Clinton campaign, as we shall see below.)
Second, from 2005-9 DNC chair Howard Dean:
Turns out the memo Donna spoke about applied only to the general election. If so then this memo is standard operating procedure for 15 years https://t.co/fsU1kMZoSp
— Howard Dean (@GovHowardDean) November 3, 2017
Question: Did the agreement apply only to the general election, and not the primary? (Dean says “this memo,” but he also omits the distinction between the MOU and the JFA.)
Third, from Elizabeth Warren. CNN:
“We learned today from the former Democratic National Committee Chairwoman Donna Brazile that the Clinton campaign, in her view, did rig the presidential nominating process by entering into an agreement to control day-to-day operations at the DNC,” Tapper said, continuing on to describe specific arms of the DNC the Clinton camp had a say over, including strategy and staffing, noting that the agreement was “entered into in August of 2015,” months before Clinton won the nomination….
And Warren responded simply: “Yes.”
Question: Can we say that the 2016 Democratic primary was rigged? (Tapper uses the word “rigged,” and Warren adopts it, but a careful reading of Brazile’s article shows that although she uses the word, she does not actually make the claim.)
In this post, I’m going to answer each of these three questions by looking at the documents, plural, in question (Spoiler: My answers are “No,” “No,” and “Yes,” respectively.) Here is a timeline of the documents:
8/26/2015 (signed): The Memorandum of Understanding (MOU, or “memo”). Available for download at MSNBC. The MOU characterized by NBC as a “side deal,” specifies how the JFA is to be implemented. Hence, “the agreement” comprises both documents; the JFA cannot be understood without the MOU, and vice versa.
11/5/2105 (reported): The Sanders-DNC Joint Fundraising Agreement. I can’t find a copy online, but it’s described by ABC here. If there is an MOU that accompanies the Sanders JFA, it has not come to light, and presumably, by this point, it would have.
In summary, the Clinton JFA set up the Hillary Victory Fund
scam, the MOU gave Clinton control of (much of) the DNC apparatus, and (according to Sanders campaign manager Jeff Weaver) the Sanders JFA bought their campaign access to the DNC voter list, and was never used for fundraising because the DNC never asked the campaign to do any. So to answer the our first question, we’ll look at the JFA. To answer the second, we’ll look at the MOU. And to answer the third, we’ll see how all the evidence balances out.
Were the Agreements “the Same” for Each Campaign?
Perez is wrong. The agreements were not at all the same, either formally or substantively.
Formally, the agreements were not the same because the Clinton JFA had an MOU (the “side deal”) and the Sanders JFA did not. ABC:
[T]he Clinton campaign Friday afternoon confirmed the existence of a memo between the DNC and their campaign, which specifically outlines an expanded scope and interpretation of their funding agreement…. [R]epresentatives from Sanders’ former campaign say they only signed a basic, formulaic fundraising agreement that did not include any additional language about joint messaging or staffing decision-making [as does the MOU].
Substantively, the agreements weren’t the same either. The substance of the JFA was a scheme enable the Hillary Victory Fund to collect “big checks” (as Politico puts it), supposedly behalf of the state parties, but in reality treating them as conduits to the coffers of the Clinton campaign. Page 3:
From time to time and in compliance with FECA, after expenses have been deducted from the gross proceeds, the Victory Fund will transfer the net proceeds to the Committees according to the Allocation Formula, as modified by any reallocation required.
“[T]he Committees” being the state party political committees, into whose accounts the contributions were deposited, only to be immediately removed and transferred to the Clinton campaign (at least for the states that signed entered into the agreement; a few did not).
However, the Sanders campaign wasn’t in the business of collecting “big checks,” being small-donor driven. Hence the substance of the agreement could not have been the same. ABC once more:
Former Sanders campaign manager Jeff Weaver told ABC News Friday night that the campaign entered the agreement with the party in November 2015 to facilitate the campaign’s access to the party’s voter rolls. Weaver claims the DNC offered to credit any fundraising the senator did for the party against the costs of access to the party’s data costs, priced at $250,000. But, Weaver continued, the party did not follow up about fundraising appearances for the independent senator.
Instead, the Sanders campaign raised the $250,000 from small donors. WaPo:
Weaver said the Sanders campaign decided early on to ignore the joint fundraising program and raise small dollars on its own to pay for access to the voter file. “Who are the wealthy people Bernie was going to bring to a fundraiser?” Weaver asked. “We had to buy the voter file right before the primaries.”
A second difference in substance: Let’s remember that for Clinton, the JFA enabled her campaign to circumvent contribution limits for large donors (Brazile: “Individuals who had maxed out their $2,700 contribution limit to the campaign could write an additional check for $353,400”). The Sanders campaign, by contrast, had no issue with maxed out donors: “During fall ’15, 99.8% of Bernie donors could give again” (because it’s awful hard to max out $27 at a time).
Suppose you were comparing two mortgages on different houses: One mortgage has a side deal attached, the other does not. One is for a lavish facility and demands a complex financing arrangement involving a third party. The other is for a fixer-upper and a lump sum is paid in cash. Would you say those two mortgages are “the same,” or not? Even if they both had the word “Mortage” at the top of page one?
Did the Agreement Apply Only to the General Election, and not the Primary?
We now turn our attention to the MOU. Howard Dean, sadly, is wrong. The MOU contains two key passages; the first describes the relationship between Hillary for America (HFA; the Clinton campaign) and the DNC (Brazile: “fully under the control of Hillary’s campaign”), and the second is language on the general election. Let’s take each in turn. On control, pages 1 and 2:
With respect to the hiring of a , the DNC agrees that no later than September 11, 2015 it will hire one of two candidates previously identified as acceptable to HFA.
2. With respect to the hiring of , in the case of vacancy, the DNC will maintain the authority to make the final decision as between candidates acceptable to HFA. 3. Agreement by the DNC that over the staffing, budget, expenditures, and general election related communications, data, technology, analytics, and research. The DNC will provide HFA advance opportunity to review . This does not include any communications related to primary debates – which will be exclusively controlled by the DNC. The DNC will alert HFA in advance of .
That’s pretty amazing, isn’t it? Personnel is policy, as they say, and the Clinton campaign has made sure that the DNC’s Communications Director and new hires in the senior staff in the communications, technology, and research departments will be acceptable to it. The Clinton campaign will also review all mass email and communcations (which explains why Brazile, as interim DNC chair, couldn’t send out a press release without checking with Brooklyn. Since the notorious debate schedule was already controlled by Wasserman Schultz, there was no point messing about with it, I assume.) There is one place in this passage where the general election is mentioned, so let’s look at it:
Agreement by the DNC that HFA personnel will be consulted and have joint authority over strategic decisions over the staffing, budget, expenditures, and communications, data, technology, analytics, and research.
At the most generous reading, the Clinton campaign has “joint authority” with the DNC over “strategic decisions over the staffing, budget, expenditures.” At the narrowest reading, given that the “general-election[-]related qualifier applies only to “communications,” the joint authority applies to ”strategic decisions over the staffing, budget, expenditures, and … data, technology, analytics, and research.” And given that the Clinton campaign is writing the checks that keep the DNC afloat, who do you think will have the whip hand in that “joint authority” relationship?
Now to the clause that supposedly says the agreement (JFA + MOU) applies only to the general election. Here it is, from page 3:
Nothing in this agreement shall be construed to violate through the Nominating process. All activities performed under this agreement will be focused exclusively on preparations for the General Election and not the Democratic Primary. Further we understand you may enter into similar agreements with other candidates
(Pause for hollow laughter, given Wasserman Schultz’s defenestration, Brazile passing debate questions to the Clinton campaign, etc.). First, even though Hoho seems to think it’s exculpatory, the clause is an obvious fig leaf. Glenn Greenwald explains:
DNC and Clinton allies pointed to the fact that the agreement contained self-justifying lawyer language claiming that it is “focused exclusively on preparations for the General,” but as Fischer noted that passage “is contradicted by the rest of the agreement.” This would be like creating a contract to explicitly bribe an elected official (“A will pay Politician B to vote YES on Bill X”), then adding a throwaway paragraph with a legalistic disclaimer that “nothing in this agreement is intended to constitute a bribe,” and then have journalists cite that paragraph to proclaim that no bribe happened even though the agreement on its face explicitly says the opposite.
Second, the DNC itself does not believe that it has any “obligation of impartiality and neutrality” whatever. From Wilding et al. v. DNC Services Corporation, D/B/A Democratic National Committee and Deborah “Debbie” Wasserman Schultz (as cited in Naked Capitalism here), the DNC’s lawyer, Mr. Spiva:
MR. SPIVA: [W}here you have a party that’s saying, We’re gonna, you know, choose our standard bearer, and we’re gonna follow these general rules of the road, which we are voluntarily deciding, we could have — and . That’s not the way it was done. But they could have. And that would have also been their right, and it would drag the Court well into party politics, internal party politics to answer those questions.
Third, look at the institutional realities from point one on control. The Clinton campaign had control over the Communications Director slot and major strategic decisions from the moment the agreement was signed. Are we really to believe that they were behaving as neutral parties? (One obvious way to have shown that would have been to release the MOU either when it was signed.)
Can We Say that the 2016 Democratic Primary Was Rigged?
Brazile herself says no. She says, of “rigging”:
I found no evidence, none whatsoever. ‘The only thing I found, which I said, I’ve found the cancer but I’m not killing the patient,’ was this memorandum that prevented the DNC from running its own operation,” Brazile added
I think Brazile is either overly charitable, or overly legalistic (perhaps confusing “rigged” with “fixed,” where only in the latter case is the outcome absolutely determined). I also think she’s wrong. The dictionary definition of rigged is:
to manipulate fraudulently
There’s ample evidence of rigging in both the JFA and the MOU. The JFA enabled the Hillary Victory Fund, which was a fraudulent scheme to allow big donors to contribute to the Clinton campaign by using the states as passthroughs. And the MOU enabled to Clinton campaign to fraudulently manipulate the public and the press into the belief that the DNC was an independent entity, when in fact it was a wholly owned and operated subsidiary of the Clinton campaign.
I know we’re not supposed to “relitigate” the 2016 campaign; we’re supposed to look forward and not back. However, the demand not to “relitigate” assumes that the case is closed; as Brazile shows, we’re hardly through with the depositions, let alone prepared to render judgment. So, when you hear “relitigate,” think “silencing tactic,” and ask yourself who and what silence serves. And perhaps this post will provide a basis for further discussion.
 Although the name “Democratic Party” is a misnomer, I understand that some are triggered by the more accurate “Democrat Party,” and so I am adopting the older locution for this post.
 WaPo: “Debbie Wasserman Schultz of Florida was forced aside by the release of thousands of embarrassing emails among party officials that appeared to show coordinated efforts to help Clinton at the expense of her rivals in the Democratic primaries. That contradicted claims by the party and the Clinton campaign that the process was open and fair for her leading challenger, Sen. Bernie Sanders of Vermont.”
 Institutionally, this shows that the cozy relationship between the Clintons’ Democrat faction and many members of the press, shown so vividly in the Podesta emails, continues unabated.
I had promised Bernie when I took the helm of the Democratic National Committee after the convention that I would get to the bottom of whether Hillary Clinton’s team had the nomination process, as a cache of emails stolen by Russian hackers and posted online had suggested.
I had tried to search out any other evidence of internal corruption that would show that the DNC was the system to throw the primary to Hillary, but I could not find any in party affairs or among the staff. I had gone department by department, investigating individual conduct for evidence of skewed decisions, and I was happy to see that I had found none. Then I found this agreement.
“This agreement” being the MOU. She characterizes the MOU as “not illegal, but it sure looked unethical,” and “the fight” as not “fair.” The MOU was not “criminal,” but “compromised the party’s integrity.” Brazile’s definition of “rigging” seems to me to be unduly high.