Is the Hillary Victory Fund a Fraud?

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


Awhile back I wrote about Hillary Clinton’s fundraising apparatus, the Hillary Victory Fund, that is (allegedly) raising money for down-ticket candidates. She is frequently lauded for this altruistic effort, in news and social media, and last week Rachel Maddow asked Bernie Sanders when he might start fundraising like that, too. However, as I wrote earlier, there is something profoundly, um, fishy about the whole “Victory Fund” apparatus.

Some background, from what I wrote in February:

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.

Now some other folks finally are asking question, too. And it turns out that the money allegedly going to those timeserving down-ticket candidates may be going somewhere else entirely.

Mike the Mad Biologist does a good job of pulling information together. This is from a Washington Post article from February that I missed, somehow.

… the states have yet to see a financial windfall. Meanwhile, Clinton’s campaign has been a major beneficiary, getting an infusion of low-dollar contributions through the committee at a time when rival Bernie Sanders’s army of small donors is helping him close in on her financially. The fund is run by Clinton campaign staff, and its treasurer is Clinton’s chief operating officer.

Do tell.

The early, expansive use of a jumbo-size joint fundraising committee shows how the Clinton campaign has worked to maximize donations from wealthy supporters, seizing on rules loosened by the Supreme Court.

Many states were wary of joining the effort, worried that such a partnership would be perceived as an endorsement of Clinton and might interfere with their efforts to raise money from home state donors. But campaign officials — including Marlon Marshall, Clinton’s director of state campaigns — emphasized that this was a way to strengthen the party at its roots, a message Clinton echoed in the speech she delivered at the Minneapolis meeting to DNC members.

Makes you wonder how many of those superdelegates were bought.

“I’ve never seen anything like this,” said Lawrence Noble, a former general counsel of the Federal Election Commission (FEC) who is now with the nonpartisan Campaign Legal Center. “Joint victory funds are not intended to be separate operating committees that just support a single candidate. But they appear to be turning the traditional notion of a joint committee into a Hillary fundraising committee.”

Of the $6.4 million the Hillary Victory Fund spent on operating costs last year, two-thirds went to two Washington, D.C.-area vendors that also work for the Clinton campaign: Bully Pulpit Interactive, which received $1.9 million for online ads, and Chapman Cubine Adams +Hussey, which was paid $2.4 million for direct mail solicitations, Federal Election Commission records show.

The victory fund also sponsors Clinton’s online store, allowing donors who have already given the maximum to her campaign to purchase Hillary lapel pins, caps or car magnets, with their money benefiting the party. It’s similar to the way President Obama’s online shop was run in his 2012 reelection.Aides to Sanders, whose joint fundraising committee with the DNC has not yet been active, said the Hillary Victory Fund appears to be functioning as an arm of Clinton’s campaign.

Meanwhile, on social media, today I ran into a nest of Bernie supporters who wanted to tell the world about Hillary Clinton’s old Travelgate scandal from 1993. What can one say, but argh.

Now Margot Kidder (that Margot Kidder? I think yes) writes in Counterpunch that some screwy things are going on with the money at state level.

The Alaska Democratic party, in its end of the year filing with the FEC, said it raised $43,500 from the Hillary Victory Fund with 10,000.00 dollar donations from Clinton friends and billionaires, including hedge fund manage S Donald Sussman, and Hyatt Hotel heir JB Pritzker. ( two of the several $10,000 donors to the Montana State Democratic Party) . But in the same report it said it transferred the same amount of money, $43,500 back to the DNC – . a technically legal move that effectively obliterates federal limits on donations to the national committee.

“It just becomes a way to funnel more to the DNC to support the Clinton Campaign”, said Paul S. Ryan, deputy executive director of the Campaign Legal Centre, which advocates for campaign finance reform. “It’s effectively Hillary Clinton’s team soliciting Hillary Clinton’s supporters for much bigger checks than they can give to the campaign.”

The same thing happened with the Maine State Democratic Party with many of the same billionaire donors. Maine attracted many of Clinton’s biggest donors. But the contributions didn’t stay in Maine either, or in any of the other state democratic parties to which Hillary Victory Fund donations have been funneled. In October and November two transfers totaling 39,000 from the Hillary Victory Fund to the Maine Democratic party sat for less than 48 hours before the same amounts were transferred to the DNC in Washington.

What the bleep is going on? Kidder goes on to say that Barack Obama had a similar deal gong on in 2008, but only after he had secured the nomination. Making these arrangements before the nomination makes it a very different thing —

The Democratic spokespeople for the17 states that refused to go along with the Clinton campaign’s plan, even though many of them were as broke as the Montana State Democratic Party was (Nebraska springs to mind), were clear that it seemed less than democratic to be choosing sides in a primary that hadn’t happened yet. That the very purpose of a primary was to let the people choose which candidate they wanted to represent them and to not let the party establishment load the dice in their own favour. They made it obvious that they were choosing democracy over kick-backs.

“A joint fundraising committee linking Hillary Clinton to the national Democratic Party and 33 state parties is routing money through those state parties and back into the coffers of the Clinton campaign and all its PACS and Funds” “It is a highly unusual arraignment if only because presidential candidates do not normally enter into fundraising agreements with their party’s committees until after they actually win the nomination. And second, Clinton’s fundraising committee is the first since the Supreme Court’s 2014 McCutcheon v FEC decision eliminated aggregate contribution limits and congress increased party contribution limits in the 2014 omnibus budget bill” said Paul Blumenthal, a writer for The Huffington Post.

A loud article in the NYT in March proclaiming that elected officials in 22 states would not support Bernie Sanders conveniently left out that those 22 states had signed agreements with the Hillary Clinton campaign and the Hillary Victory Fund.

This stinks out loud, and is worse than I had imagined. Kidder’s piece is quite good and deserves to be read all the way though, btw. It ends with a list of the states involved in the Victory Fund. The superdelegates of those states may require scrutiny.