Elaborating on the DNC-Clinton Money Laundering Scheme

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

Executive Summary:  In brief, here’s how it works: The Hillary Victory Fund is a joint fundraising committee for Hillary for America, the Democratic National Committee and the Democratic committees of 32 states and Puerto Rico. It was set up in such a way that the Clinton campaign and DNC could ask wealthy backers to give the $356,100 maximum annual contribution twice: once in 2015 and again this year.

The money passes through the state party organizations, which do benefit, but the Clinton campaign gets “kickbacks” that she can use as direct campaign contributions without the strings usually attacked to large contributions. And the DNC, which was in debt late last year, has received nearly $2 million of those dollars so far. This explains why Debbie Wasserman Schultz created a debate schedule that effectively denied national exposure to Clinton challengers.

Yes, this is perfectly legal. But, folks, this election is rigged. Legally rigged, perhaps, but rigged.


Last year, reports say the DNC was starved for cash and falling way behind the RNC in fundraising. Here is an AP story from August 2015:

Federal Election Commission reports tell a disappointing story for the party: The DNC collected $36.5 million in the first six months of the year and had almost no money in special accounts, including one designated for its convention. It had about $7.6 million in available cash and $6.2 million in debts and loans.

“The Republican National Committee, coming out of years in the red, posted $63 million in receipts through June, leaving it with $16.7 million cash on hand and $1.8 million in debts and loans. Party fundraising dominance has flipped: At this point before the 2012 election, the DNC was outpacing the RNC.”

When President Obama was elected in 2008 he instructed the DNC that they were not to accept PAC money or money from lobbyists. It was recently revealed that some time last year, Debbie Wasserman Schultz reversed that policy.

Here’s the kicker: Recently a lot of Clinton supporters have been crowing that Hillary Clinton has been raising money for down-ticket candidates, and Bernie Sanders has not. This seemed odd to me; normally presidential contenders don’t funnel money down-ticket until after they’ve locked up the nomination. But it appears Hillary Clinton’s generosity isn’t coming from altruism; the Clinton Victory Fund is directly benefiting from DWS’s change of policy in ways that the Sanders campaign is not.

The Clinton Victory Fund has made fund-raising pacts with 33 state Democratic organizations that benefit both the states and the Clinton campaign. The CVF is raising money for the Democratic Party, not the Clinton campaign. Major donors can give hundreds of thousands of dollars to the CVF, and from there the money is passed on to the state Democratic parties. After passing through the states, some of this money is kicked back to the DNC and to the Clinton campaign. The advantage to Clinton is that the money has been “laundered” in a way that she can use it as if it were a direct contribution. The strings that normally go with Super PAC money do not apply.

From Bloomberg News, February 3:

Clinton’s move last year to lock in fundraising alliances with 33 state Democratic parties has already added $26.9 million to the mountain of hard money she has raised so far, a Bloomberg analysis of Federal Election Commission filings shows. Bernie Sanders, her competitor for the nomination, has inked one such deal, netting a total of $1,000.
The agreements, thanks to a 2014 U.S. Supreme Court decision, make it possible for major donors to give hundreds of thousands of dollars in hard money to a candidacy, amounts far greater than the $2,700 limit on contributions directly to a campaign.

“At least 24 donors have given $300,000 or more to the fundraising vehicle, known as the Hillary Victory Fund, including Haim and Cheryl Saban, George Soros and Daniel Abraham, longtime donors to both Bill and Hillary Clinton’s political campaigns and the Clinton Foundation. 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 coordinate with the candidate.

“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”

In other words, this enables Clinton to launder Super-PAC money in a way that allows her to use the money as if it were direct contributions to her campaign. And I’m sure Hillary Clinton wants you to know this is perfectly legal. And the national and state Democratic Party campaigns now have millions of dollars they wouldn’t have had otherwise.

See also the Washington Post, February 20:

Establishing a victory fund the year before the election allowed the Clinton campaign and DNC to ask wealthy backers to give the $356,100 maximum annual contribution twice: once in 2015 and again this year. …

“…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.”

But it appears this was a deal between DWS and HRC, which explains Wasserman Schulz’s obvious sabotage of primary challengers to Clinton, in particular the reluctance to schedule debates that might allow America to get a good look at those challengers.

In recent weeks Hillary Clinton has been wrapping herself in President Obama’s record. She promises to build on his accomplishments, and accusations that Bernie Sanders has been hostile to the Obama Administration (not true) have been swamping social media. Rather ironic that it’s Clinton who is responsible for dismantling Obama’s Super PAC policy.

(H/t Our Doug.)

7 thoughts on “Elaborating on the DNC-Clinton Money Laundering Scheme

  1. So, not exactly quid pro quo.

    More like quid derp quo.

    DWS needs to go, and so does the entire DNC!
    Hopefully, Doug will take care of DWS.
    I don’t know how we get rid of the DNC.

    Yes, morals and ethics in candidates (*cough*cough, Hillary) should help the DNC bleed out, eventually.
    But, we ARE talking about politicians here…

  2. I have given a lot of thought to reforming the role of the political parties.

    Thee are two avenues that I see. You can either limit who give to the parties, and the amounts, treating the parties like candidates OR you can isolate the parties from directly supporting the candidates financially if the party is accepting unlimited corporate money.

    Underlying either approach is the principle that our elected officials work for the citizens – not the parties they associate with. If the parties are allowed to influence elections directly by funding candidates or advertise in support (or opposition) to any candidate, that has to be ‘people’ money exclusively, not corporate money or huge sums from gazillionares.

    Under that approach, if you control the sources of funds to the party at the state and/or national level, you don’t have to control the interaction between the party and the candidates. They can coordinate as much as they want because all the money funding the party and the electioneering is ‘people’ money.

    If the party at the state or national level wants to accept corporate money, there should be strict restrictions and criminal penalties for violations. If the party accepts corporate or gazillionare money, they must divorce themselves from supporting or opposing individual candidates. They become constrained as a issue advocacy group, able to advance a philosophy to voters, but divorced from the candidates.

    Under either approach, the party would have much less power to demand a particular stand by a candidate under the threat that the party will offer or withhold support in sufficient quantities to change the outcome of a race. The parties would have to try to persuade, but they could not compel a particular stand. There’s a name for that chaotic approach to government – it’s called democracy.

  3. I think you’re gyrocopter cowboy days are over, Doug. I must say, you have the good ideas, good intentions, and REALLY big balls . And I was both surprised and thrilled with your action. You’ll need a Harrier jet for an encore performance , or a real fire breathing dragon. 🙂

  4. Pingback: How the Vast Right-Wing Conspiracy Made Hillary Clinton Invincible | The Mahablog

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