Following the Hillary Victory Fund Money

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Sanders and Clinton

UPDATED: Please read this more recent post on the Hillary Victory Fund, which I believe clarifies the issues quite a bit.

A lawyer for the Sanders campaign has formally complained to the DNC about the Hillary Victory Fund and possible violations of campaign finance law. Most news outlets are pooh-poohing this as a stunt. Let’s take a look.

This is what the Sanders campaign is complaining about:

Unlike Clinton’s presidential campaign committee, Hillary for America, the joint committee may accept large donations of up to $356,100. The first $2,700 of this amount is eligible for transfer to the Clinton campaign, $33,400 can be transferred to the DNC, with any remaining amount, up to $10,000, to each participating state party. According to public disclosure reports, however, the joint Clinton-DNC fund, Hillary Victory Fund (HVF), appears to operate in a way that skirts legal limits on federal campaign donations and primarily benefits the Clinton presidential campaign.

The financial disclosure reports on file with the Federal Election Commission indicate that the joint committee invested millions in low-dollar, online fundraising and advertising that solely benefits the Clinton campaign. The Sanders campaign “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” according to the letter to the DNC. Both outlays benefit the Clinton presidential campaign “by generating low-dollar contributions that flow only to HFA [Hillary for America] rather than to the DNC or any of the participating state party committees.”

The questionable outlays “have grown to staggering magnitudes” and “can no longer be ignored,” Deutsch added.

True? This was in Politico last week:

The fund comprises Clinton’s presidential campaign committee, as well as the Democratic National Committee and 32 state party committees. As a result, it can accept checks as large as $358,000 per person — a total determined by the maximum donation to each of its component committees ($5,400 to the Clinton campaign, $33,400 to the DNC and $10,000 to each of the state parties).

Yet, during the first three months of the year, the $2 million transferred by the Hillary Victory Fund to various state party committees paled in comparison to the $9.5 million it transferred to Clinton’s campaign committee or the $3.5 million it transferred to the DNC.

Numbers baffle me easily. But if the Clinton campaign can only take the first $2,700 off the top of each donation (and cannot exceed $2,700 from one person in a given year), and the rest of these large donations go to the DNC and the states, how can the Clinton campaign end up with the lion’s share of the Hillary Victory Fund money?

And the Hillary Victory Fund also spent $6.7 million on online ads that mostly looked like Clinton campaign ads, as well as $5.5 million on direct marketing. Both expenses seem intended at least in part to help Clinton build a small donor base, an area in which Sanders has far outpaced her.

Keep in mind that the Victory Fund is managed by Clinton campaign staff, and its treasurer is Clinton’s chief operating officer, according to this Washington Post story from last February.

With the caveat that I’m not an election law attorney — it’s my understanding that the Clinton campaign can only use the first $2,700 of any donation any way it wants. How is it that so much of this money is being spent in ways that appear to benefit only the Clinton campaign? And keep in mind that Hillary’s followers praise her effusively for raising money for “down ticket Democrats.”  A lot of them were outraged today that anyone would question what’s going on with this money.

And why isn’t news media at least taking this seriously?

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6 Comments

5 Comments

  1. Mark Brooks  •  Apr 19, 2016 @7:35 pm

    The Young Turks covered this a couple of weeks ago.

  2. maha  •  Apr 19, 2016 @8:05 pm

    Mark Brooks — and I covered it before the Young Turks did. But this is new information. This is stuff Cenk Uygur didn’t know two weeks ago.

  3. Scott Bidstrup  •  Apr 19, 2016 @9:05 pm

    You asked: “But if the Clinton campaign can only take the first $2,700 off the top of each donation (and cannot exceed $2,700 from one person in a given year), and the rest of these large donations go to the DNC and the states, how can the Clinton campaign end up with the lion’s share of the Hillary Victory Fund money?”

    The answer is easy. Superdelegates. It’s not that the Clinton campaign benefits directly; it’s that the 36 state Democratic committees, to get the money from this “Victory Fund,” had to pledge their superdelegates to Hillary. You scratch my back, I’ll scratch yours.

    That’s what is so smelly about this. It was bribery in all but name. That’s why Bernie is so incensed about it, as well he should be. It was a short-circuiting democracy in the name of the Best Democratic Party Money Can Buy.

    One more reason I’ll be voting for Jill Stein this year.

  4. maha  •  Apr 19, 2016 @10:02 pm

    //The answer is easy. Superdelegates. It’s not that the Clinton campaign benefits directly; it’s that the 36 state Democratic committees, to get the money from this “Victory Fund,” had to pledge their superdelegates to Hillary. You scratch my back, I’ll scratch yours. //

    True, but that’s the answer to a different question, not the one I asked. I’m talking numbers here. The Hillary Victory Fund is a kind of PAC, and some individuals are giving hundreds of thousands of dollars to it. Clinton is only supposed to skim the first $2700 from any one donor per year, and the rest of it is supposed to go to the DNC and the states to be used for other campaigns. That being so, how is it that the Clinton campaign is ending up with most of the money (per the Politico article)?

    One of the variables I don’t know is the size of an average donation. If she were getting lots of relatively small donations, $3000 or less, maybe the math works out. But I keep reading she’s getting these gi-normous donations from wealthy people, in which case most of the money should be going to the DNC and the states. But it looks as if the Clinton staffers managing this money are treating it as a kind of slush fund.

  5. bernie  •  Apr 19, 2016 @9:13 pm

    When I hear too close to call at this point in time I am one proud American also named Bernie.

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