Browsing the blog archivesfor the day Wednesday, April 20th, 2016.


Re-explaining Why the Hillary Victory Fund Is an Issue

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It appears, from comments here and on Facebook, that I failed utterly to explain my concerns about the Hillary Victory Fund yesterday. So I’m making another attempt.

The Hillary Victory Fund is a joint fundraising effort set up with the Clinton campaign, the Democratic National Committee and the Democratic parties of 33 states.  It’s essentially a PAC. Individual donors can give up to $356,100 per year, and since this was set up in 2015 some have given this maximum for two years, for a total of $712,200. Of course, a lot of donations are smaller.

All the money raised by the HVF goes to the Clinton campaign first. I had previously read that she gets to keep the first $2700 from each individual per year, or $5400 for contributions made in 2015 and 2016. But I just read that is for the primary only; she can keep another $2700 per each individual contributor for the general election fund.

Since the money goes to her first, she can always keep the maximum amount allowable. For example, if the donation is $2700 she keeps all of it. This money can be treated as individual donations, with no strings attached; the Clinton campaign can do whatever it wants with it. And this is completely legal. We can quibble about whether it is ethical, considering the fund is being touted as some altruistic effort to raise money for down-ticket Democrats. But let us put that aside for now; it’s not part of the newer allegations.

What Clinton cannot keep goes to the DNC, where it is allocated by a joint committee that includes Clinton campaign staff. The DNC keeps $33,400 of each individual donation per year, which is the biggest portion. That’s where the spending issues get murky. I’ll come back to this in a bit.

And then the portion the DNC cannot keep goes to the state Democratic parties in chunks of $10,000. It appears that by then what’s left over amounts to crumbs. Again, this is legal, but it burns me whenever somebody chirps about all the millions of dollars Clinton is raising “for down ticket Democrats.” The largest portion of the money stops with the joint committee at the DNC.

There are also huge ethical questions about whether this is, in effect, turning these state Democratic party organizations into arms of the Clinton campaign committee. As long as she’s in the race, the crumbs keep coming. This would be a huge incentive for them to “help” Clinton win primaries and for their superdelegates to remain loyal to Clinton, corrupting the primary process. Similar kinds of joint fundraising operations have been set up before, but not until after a candidate had secured the nomination. This is the part about the fund I’ve complained about before. It’s legal, yes, but it still stinks.

However, the new allegations are about something else.

Let us go back to the DNC and the joint committee allocating the funds passed on to them by the Clinton campaign. Here is where the new allegations come in. The joint committee, as I’ve said in earlier posts, includes Clinton campaign staff. Its treasurer is Clinton’s chief operating officer. The joint committee also includes DNC officials, I assume, who have reason to be loyal to Clinton because the HVF saved their financial asses and hauled the DNC out of the red last year.

The money passed on to the joint committee by the Clinton campaign is not supposed to be used by the Clinton campaign any way it wants. There are legal strings attached. Are we all clear on that?

The new allegation is that this money being allocated by the joint committee is mostly being spent in ways that help the Clinton campaign, either primarily or exclusively. This is where the legal issue gets sticky. Instead of keeping a wall between Clinton money and DNC money, which I believe is what the law calls for, it appears the money is being treated as something fungible that is still mostly being spent according to the wishes of the Clinton campaign.

This takes me back to what I wrote yesterday that nobody seemed to get. The Sanders campaign said,

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.”

This seems to me a legitimate beef, yet no one in media is taking it seriously. There was a segment on Rachel Maddow in which Maddow and Andrea Mitchell sat around and talked about what a mistake it was for the Sanders campaign to make an accusation like that, since the Hillary Victory Fund is perfectly legal, and Mitchell said she had talked to the DNC, which had told her nothing was amiss.

Yes, of course the DNC would say that. Duh.

Steve Benen also wrote a post at the Maddow Blog that is being widely linked to as a rebuttal of the Sanders charges. But Benen doesn’t seem to me to address what the charges actually are.

Now, I would be the first person to confess I don’t have a head for numbers. But as I wrote yesterday, this Politico article seemed alarming:

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.

Is this saying that the joint committee is just donating the money back to the Clinton campaign?

And the Hillary Victory Fund [meaning the joint committee] 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.

Knowing Clinton, she probably does have some team of lawyers keeping an eye on this to be sure there’s at least a fig leaf of legality stuck to this operation. But does this not seem questionable?

Update: You can click on this link to see the list of participating states and the amount of money each has received as of the end of March. As you can see, the states are getting peanuts compared to what the Hillary Victory Fund has taken in.

 

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