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.

 

36 thoughts on “Re-explaining Why the Hillary Victory Fund Is an Issue”

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  4. Clintonian at least. Questionable only in that the fig leaf is a legalism rather than material. This is all insider games. The political class has worked the angles for years. The RWNJ book sales dollar dodge is well known. Newt Gingrich has survived foe decades now on this game.

  5. “But does this not seem questionable?”

    Not really, it’s pretty obvious to me, Clinton has figured out a loophole in what little campaign finance laws we still have on the books and is gaming the system, so what? From what I’ve read this was all made legal by the Supreme Court’s 2014 ruling in the McCutcheon v. Federal Election Commission case that overturned aggregate campaign contribution limits. Compared to the other side were we have Oligarchs outright buying politicians the victory funds seems like a high school fund raiser.

    https://www.youtube.com/watch?v=JkhX5W7JoWI

  6. The “so what” is that even though its legal, it goes against the constant professions from Clinton of “fighting for you” as someone who is NOT a corporate or party insider; of NOT being beholden to the whims of those making these large contributions and of NOT being a deeply embedded party insider at the controls of a party that has had its thumb on the scale for her campaign. For example, all the things banks can now do as a result of Glass-Steagal no longer being law that cause significant harm are legal too, but its counter-intuitive to “so what” them away when you’re, directly or indirectly, on the business end as it were of that harm.

    I could “so what” this away myself IF, this deal included the Sanders campaign in a similar way that the Clinton camp is embedded in and profits from it. This way both campaigns are sharing resources. But that would require a party that is not essentially an adjunct wing if the Clinton campaign.

  7. It’s the day after the new York state primary, and it seems pretty damn clear that Senator Sanders is not going to pull off some sort of spectacular upset and get to the convention with a majority of the pledged delegates. His campaign manager said last night that the Sanders campaign would spend June and July trying to get superdelegates to flip and support the senator. Not too likely, is it?

    At this juncture, all the picayune details about the Hillary Victory Fund are going to make no difference whatsoever in the outcome of the contest between Secretary Clinton and Senator Sanders. I therefore have to ask what’s the point of going into all those details. Look, we already know that the HVF operation is legal but involves skating on ethical thin ice. Repeating that and repeating that and repeating that is not going to add anything to our understanding of the situation. What it will do is pump up the outrage of diehard Sanders supporters and solidify the opinion of diehard Clinton supporters than Sanders is just out to draw blood, damn the consequences.

    • Joel Dan Walls — so campaign corruption is just something we have to accept without complaint? This isn’t so much about Sanders as it is about the degree to which the nomination process is rigged. What we’ve been watching is not democracy; it’s more like democracy theater. Those who are not establishment insiders need not apply. This is unhealthy for the Democratic Party and unhealthy for America.

  8. I have to admit, this is a mixed bag for me.

    With the rules being what they are, I want Democrats to play those rules hard, but as ethically as possible.

    But a lot of people have talked how GENEROUS HRC has been for down-ticket races, and how that blasted Bernie has been such a scrooge, and really, this should be the guilty secret, not the bragging point!

    But that’s politics.

    But it’s not fair to us! We deserved a nice, loud, contentious nomination fight, with Bernie getting reasonable press from the getgo, and the party machinery giving him a fair shot.

    Absolutely true – unfortunately, that milk is spilled, and best we can do is soak it up with last week’s bread and feed it to the hogs.

    But HRC is doing stuff that we wish *NO ONE* could do.

    Yep. But if one person was able to do that, I’m glad it was a Democrat. And if multiple people had done it, Bernie would be at a disadvantage for not having done it.

    I wanted a real, honest “come on, let’s mix it up!” Democratic nomination battle, and HRC was crowned heir apparent so early and given so much deference in both the party machinery and the press that it’s completely amazing that Bernie’s gotten this far. And maybe if he’d had this kind of coverage from the start, maybe the party machinery would have had to allow a real battle instead of jumping in the tank for Hillary. Maybe he’d have had time to sharpen his game in some areas (I’ve heard some stories that his African American outreach sucked – poorly trained canvassers, and no coherent message).

    But the press was weak and the machinery sided with the perceived-likely-winner, which tilted the playing field even further, and… and this, while seeming like a loophole we’d be wise to close, and pretty dodgy sounding, seems like something that doesn’t damn HRC as a person or politician, on the assumption that, if the Republican Clown Car hadn’t been that bad, they’d have tried to pull the same sort of thing.

    Like I said, it’s a mixed bag. I don’t like it, and I’d like to hear by next Presidential cycle, it’ll be closed off. But I can’t fault a campaign for taking advantage of the rules in a strategic fashion. And I’m not sure that Bernie would have refused, if he’d had the pre-built prestige and power to do the same sort of thing.

    …except Bernie wouldn’t *get* that prestige or power because he didn’t suck up to the right people and I’m annoyed that Hillary had that power, because that *is* how she got it, by making the powerful more comfortable. Full circle – it’s a mixed bag.

  9. isn’t this pretty much what Obama did with his millions in 2008? He consolidated the party apparatus in what was tantmount to a PAC as well. So how was that different. Why is it a problem now and not then?

    • sanctimonious purist — Not exactly. The chief difference is that Obama didn’t set up a deal like this with the states until AFTER he had secured the nomination. That meant the arrangement didn’t corrupt the nomination process, which is the part to which I object the most. It’s also the case that a lot of what Clinton is doing that is legal now would not have been in 2008. The difference is the McCutcheon decision of 2014, if you want to look that up.

  10. csm ….Bravo for that comment.

    To call it a loophole kinda diminishes the significance of what is being done. It’s defrauding the democratic process. It’s a scam. On a different level but of the same dynamic it would be like me buying my wife a motorcycle and then bragging about my generosity and thoughtfulness even though she would never use it. And I’d be forced to use it so my gift didn’t go to waste. “I did it for all you, Honey!”
    The fact is that there is a big disparity between what Clinton says and what Clinton does. And that disparity is the reason I find her not to be trustworthy..

  11. This whole system sounds like Rube Goldberg broke into a bank, and set-up a contraption to funnel money to Hillary, via the DNC.

    Thanks for doing this forwork, maha. Especially this last post. I, too, am bad with numbers, but this clarified this crap for me.

    Oy…

  12. @dan walls

    If your candidate has so little respect for Democratic voters that she pulls this sort of cheap scheme on them while lying about what she’s actually doing, why should you trust that candidate to do any of the things she’s promised when in office? Come to that, do you hold your vote so cheaply that you’ll just shrug and say “Fooled me once.. oh never mind, you can fool me again and I’ll peck up your lies like chickenfeed, because that’s how I want to be” ?

    This sort of blatant dishonesty and corruption is why the Clintons and their cronies shouldn’t be within a country mile of the Democratic party, never mind its nominee.

    • Aardvark — Yeah, I got unfriended by Marcotte today on Facebook when I told her I’d had it with the Sanders bashing. It’s a shame; I knew her from the old days when we were all against the Bush Administration.

  19. I am visiting news sites, dodging a million photos of Prince, while repeatedly searching the word “gyrocopter.” I think I’ve invented a very weird videogame. But no news yet.

  20. I’ve been checking the Tampa Bay Times..They’ve featured his story from the very beginning so I would expect they would update any information as soon as it becomes available.
    I’m hoping he fares well…He’s already incurred steep penalties for his actions and I don’t see where incarceration will serve any useful purpose. A felony conviction is a lifelong penalty.. Probation is a sufficient resolution to serve justice.

  21. 4 MONTHS (120 DAYS) IN PRISON – per CBS News.

    As Swami mentions, Doug has already paid for his act of patriotism. This sentence bites.

  22. “This sentence bites”

    Certainly any time in prison is bad but its less than half what the prosecutor was asking for, so in that light it could have been worse? Best of luck to you Doug.

  24. Sorry to hear about the sentence, Doug.
    It sucks.

    You’re the lead article on Raw Story – small consolation, that.

    I’d rather you weren’t in Raw Story at all, or, a story about how they decided you’d already been punished enough.

    You’re a very brave man for what you did. You can do the time standing on your head,

    Best of luck!

  26. Hello friends. Yes, four months and a year of supervised release – probation basically. I will be allowed to self-report in FL. Not sure where, yet. We will request a low-security prison or ‘camp’ but it’s up to Bureau of Prisons. Florida almost certainly and not a medium or high security prison.

    The rationale was very questionable. The judge relied on the perjured sworn testimony of Inspector Clancey of the Secret Serice and a lot of maybe scenarios.

  27. Good luck with everything, Doug. As far as I can see, your “crime” is to have disrupted the stage-set of the oligarchic elite and caused them some embarrassment in the process. Personally, I think that’s a good thing and more citizens should do it more often.

  29. Too bad, Doug, that you aren’t a big or rich enough fish to get sentenced to “hard” time at some country club prison, where the inmates bitch that the golf course is only a 3-hole one.

    And that the tennis courts have a line to play, and you can only play one hour.

    Tell them you keep Kosher, and you might get better meals. And if they question if you’re Jewish, tell them that it’s none of their business. But that your last name used to be Hughesberg, or Hughsowitz.

    Sorry for the bad jokes. I’m just trying to keep your spirits up. 😉

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