Report: More Secret Money Pouring Into Judicial Races

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In an election season that has seen an unprecedented blockade of President Obama’s Supreme Court nominee, Merrick Garland, it’s easy to overlook troubling developments for judicial selection at the state court level, where 95 percent of all cases are heard.

In total, 39 states hold elections to choose all or some of their judges. This November, 27 states will hold elections for seats on their highest courts. Early indicators suggest that several of these races will be dominated by special interest spending, a large portion of it secret money from groups that do not disclose their donors, according to an analysis by the Brennan Center for Justice of seven supreme court elections and primaries that were completed earlier in 2016. The likely upshot: greater negative campaigning, and voters, litigants, and potentially even judges in the dark about possible conflicts of interest.

Looking forward, the Brennan Center has also identified judicial election battlegrounds to watch this fall — the states where harsh and expensive supreme court races look likely, based on indicators such as spending in primaries, candidate fundraising, and statements by politicians and interest groups. In Washington and North Carolina, for example, interest groups spent six figures on radio and television ad buys during the primaries, while political leaders and interest groups in Kansas and Montana have raised the temperature of these states’ judicial races through public statements and endorsements. In Ohio, one supreme court candidate has already booked $644,000 in TV ads, in what looks poised to be a big-spending race for an open seat.

The Brennan Center is monitoring all state supreme court contests this fall and will be issuing periodic releases and analyses in the lead-up to Election Day. Research and data will be housed on the Brennan Center’s supreme court elections page.

“Special interests know that state supreme courts have tremendous power to shape the legal and policy landscape on everything from civil rights to tort reform, even beyond a state’s borders, and they have been pouring money into these races in recent years,” said Alicia Bannon, Senior Counsel in the Democracy Program at the Brennan Center for Justice. “Polling shows that 95 percent of the public believes campaign spending influences how judges rule in cases. With the rise of outside spenders that do not disclose their donors, we can’t even identify potential conflicts of interest. This poses a major threat to the integrity of our justice system.”

Troubling Early Trends: Secret Outside Spending & Attack Ads

The Brennan Center reviewed TV ad buys in the seven states that have already held a primary or early general election for their state supreme court this year, and where at least one TV ad was broadcast (AR, ID, NC, OH, TX, WI, WV). These elections suggest several trends to look for in November’s round of judicial contests.

  • Outside Spending Dominated: To date, spending by outside groups has played a larger role in 2016 state supreme court elections than in past years. Candidates were responsible for only 35 percent of television spending in these early elections, compared to 42 percent overall in 2013-14 and 39 percent in 2011-12. All of the outside spending in 2016 to date has come from groups. The Republican State Leadership Committee, which describes its mission as “working to elect down-ballot, state-level Republican officeholders,” was the single largest outside spender, putting at least $2.2 million into races in three states (including television spending in West Virginia and Arkansas and radio advertisements in Wisconsin). While outside groups are distinct from judicial candidates’ campaigns, at least in theory, the separation is not always clear-cut. In February, for example, a Wisconsin Supreme Court justice uploaded b-roll footage of herself onto YouTube, which was then used in television ads by an outside group.
  • Secret Spenders Predominated: Seventy percent of outside television spending came from so-called “dark money” sources, which do not disclose their donors. This dynamic raises particular concerns in judicial races, where dark money can obscure conflicts of interest in cases involving major spenders. Although data is limited, there are indications this reflects a much higher proportion of completely-undisclosed money than is seen in other state races. A recent Brennan Center study of state and local elections in six states found that 12 percent of outside spending in 2014 came from dark money sources. (The study further found that an additional 59 percent of outside spending came from “gray money” sources, entities that disclose donors in a way that makes the original sources of money difficult or impossible to discern. No gray money sources have been identified in any of the 2016 supreme court races.)
  • Groups Went on the Attack: Television ads were also more negative than those seen in recent years. The rise of outside spending was a key factor. So far in 2016, outside groups were responsible for 69 percent of all negative ad spots — reducing the ability of candidates to control the tenor and substance of their own races. Overall, only 49 percent of all ad spots were positive in tone, compared with 79 percent in 2013-14 and 76 percent in 2011-12. What were the attacks about? One-in-four portrayed judges as “soft on crime.” There is growing evidence that these kind of election pressures lead to harsher sentencing in criminal cases.
  • State Spending Records Fell: Of the three states that held contested off-cycle supreme court elections in 2016 (AR, WI, WV), two set state records for television spending (AR, WV). All three had more than $1 million in spending on television ads. Overall, more than $9.5 million was spent on TV in primaries and off-cycle races this year, according to estimates from Kantar Media/CMAG and West Virginia disclosure statements.

States to Watch in 2016

Several states seem likely to attract high-spending interest groups and politicized races this year, based on early spending and fundraising patterns and public statements. Already, candidates have booked TV ads in six states for the fall, totaling $1.1 million, according to a review of TV ad contracts. Additional information about the election landscape can be found on the Brennan Center’s supreme court elections page.

  • Kansas: The state supreme court election this year is already highly charged, as multiple interests have coalesced to support or oppose the ouster of four justices standing for retention (an up-or-down vote where the judge stands unopposed). The state Republican Party, as well as Kansans for Justice and Kansans for Life, are vocally opposing the justices, citing decisions they have made on issues such as the death penalty, abortion, and education funding. On the other side, four former governors (Republicans and Democrats) are campaigning in support of the justices, and Kansans for Fair Courts is also promoting retention efforts. However, loopholes that exempt retention elections from the state’s disclosure laws will make it difficult to discern who is behind any money spent in these races.
  • Montana: Outside interests appear to be marshaling around a Montana supreme court race for an open seat, between law professor Kristen Juras and district court judge Dirk Sandefur. Juras was endorsed by the Montana Chamber of Commerce, and Montana GOP officials and the head of the Montana Petroleum Association hosted a fundraiser for her. On the other side, the Montana Trial Lawyers Association has reportedly amassed more than $110,000 in contributions to its spending arm the Montana Law PAC, although it has not yet endorsed a candidate. Sandefur has booked $121,385 in airtime on broadcast TV, and as of Aug. 27, had raised $414,000. Juras has raised over $140,000, and has not yet booked airtime. In 2014, Montana’s supreme court election set a state record, with $1.5 million in spending, 75 percent of which came from outside groups.
  • North Carolina: This year’s election, in which Justice Robert Edmunds faces challenger Judge Michael Morgan, represents an opportunity to potentially shift the ideological composition of the Court from Republican-affiliated to Democratic-affiliated judges. The state’s primary election on June 7 saw more than half a million dollars in spending according to state disclosures, a majority of it from the North Carolina Chamber of Commerce in support of Justice Edmunds.
  • Ohio: Supreme Court elections in Ohio are typically high-cost; every election since 2000 has seen at least $3 million worth of spending, including a record $11 million in 2000. This year, the Buckeye State has already seen one candidate, Pat DeWine, who will face off against Cynthia Rice in one of two races for an open seat, spend almost $644,000 in ad bookings for the fall. Rice has not yet purchased airtime.
  • Washington: Two controversial supreme court decisions regarding education funding have sparked an effort to replace three sitting high court judges. One 2012 ruling ordered the state to increase school funding, ultimately leading the Court to fine the legislature for its inaction, while a 2015 decision found that charter schools could not receive public funds. In response, the state legislature recently passed a new charter school law. One challenger, Greg Zempel, benefitted from $230,000 in outside spending during his primary, including almost $130,000 from Stand for Children WA PAC, which is funded by charter school supporters, and $100,000 from Judicial Integrity WA, which was co-founded by the former majority leader of the Washington Senate.

Other states to watch include Kentucky, Mississippi, Louisiana and New Mexico, where supreme court candidates have already booked television ads for the fall, and Michigan, which has seen multi-million dollar races in recent years.

Methodology: Data on TV ad buys for the November elections is based on an analysis of contracts posted on the FCC’s website. Spending totals are current as of 12:30 PM ET on Sept 13, 2016. To analyze primaries and early races, the Brennan Center looked at every state in which at least one television ad was broadcast in 2016 (AR, ID, NC, OH, TX, WI, WV). Spending data came from estimates from Kantar Media/CMAG, with the exception of West Virginia, where we relied on state disclosures. The analysis of ad tone and themes was based on internal coding of ads by the Brennan Center. The analysis of dark money followed the same methodology described in this recent Brennan Center report. For one major spender, the Republican State Leadership Committee, we limited the dark money analysis to the top 20 contributors, as available on opensecrets.org.

CLC: Clinton Super PAC Accepted $200,000 in Illegal Contributions from Government Contractor

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Priorities USA Action, a super PAC backing Hillary Clinton, accepted $200,000 in contributions from a government contractor in violation of federal law, according to the Campaign Legal Center.

While Priorities USA – following press coverage of the illegal contribution – returned the money to Suffolk Construction Co., it still failed to do so within 30 days of learning of the possible violation, as the law requires, the nonprofit alleged.

The Campaign Legal Center and Democracy 21 recently filed a complaint with the Federal Election Commission demanding the agency investigate and impose appropriate sanctions on both Priorities USA and Suffolk Construction Co.

“If it wasn’t for news reports highlighting these violations of the law, we’d never know if Priorities USA Action would have still refunded those contributions,” said Paul S. Ryan, deputy executive director of the Campaign Legal Center. “Super PACs and their deep-pocketed donors should not be allowed to skirt and violate the laws we have in place to protect the integrity of our democracy. This is exactly why Americans don’t have confidence in our political process, and why there is overwhelming support for reforming our campaign finance system, which includes a strong, effective FEC that enforces the law.”

“Priorities USA Action had a duty at the time it accepted two illegal contributions from Suffolk Construction Company in 2015 to determine if it could accept these contributions and the Super PAC apparently failed to perform that duty,” said Democracy 21 President Fred Wertheimer. The FEC needs to investigate this and also needs to investigate whether the Super PAC solicited these government contractor contributions in violation of the law. The fact that Priorities USA is now returning the contributions, after questions about them had been raised in published reports does not cure any violations that occurred.”

Suffolk Construction is a major federal contractor, having received $168.8 million in contracts since 2008, and its donations put it among Priorities USA’s top donors in 2015. The law is clear that federal contractors are prohibited from making contributions to a political committee while negotiating or performing a federal contract, and a political committee is similarly prohibited from soliciting and receiving contributions from a federal contractor.

The law also makes clear that political committees must examine the legality of contributions when they are received — and when later faced with new evidence that a contribution came from a prohibited source like a federal contractor, must refund the contribution within 30 days.

Priorities USA knew about the company’s status as a contractor at least as early as April 2016, when the Center for Public Integrity asked the super PAC for comment – and then published a story – about Priorities USA receiving contributions from the contractor. Yet the contributions were not returned until July, following a Hill story raising the same issue but which attracted wider attention.

“Priorities USA could have easily determined from the outset that Suffolk Construction Company was a major federal contractor, and certainly has known since April, when reporters first raised the issue,” said Brendan Fischer, associate counsel with the Campaign Legal Center. “Yet, the super PAC didn’t return the contribution when they learned it was illegal – they only did so when it became politically inconvenient.”

Money in Politics is an Urgent Civil Rights Issue: New Report, Multimedia Project

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The increasingly dominant role of mega-donors in funding American elections has reached a tipping point, further marginalizing those who are not independently wealthy or do not have access to wealthy donors — particularly women, communities of color, and underserved communities, according to a new project from the Brennan Center for Justice at NYU School of Law.

But public financing programs can help create a more equal and participatory democracy that gives these citizens a voice.

Breaking Down Barriers: The Faces of Public Financing is a multimedia publication highlighting a diverse set of elected officials from across the country, including New York City Public Advocate Letitia James, Rhode Island Secretary of State Nellie M. Gorbea, Los Angeles Councilmember David Ryu, and North Carolina Court of Appeals Judge Donna S. Stroud, who explain how public financing systems are the most effective policy solution to help elevate diverse voices in our political process. This project includes:

  • written report, featuring interviews with more than 20 state and city elected officials from all branches of government in 11 states and 6 cities on the ways in which public financing systems:
    • Lower Barriers to Entry that prevent candidates without access to large sums of money from running;
    • Change the Way Politicians Campaign by encouraging them to focus outreach and fundraising efforts on average constituents rather than on large donors;
    • Increase Citizens’ Engagement in the political process by ensuring they have a meaningful voice; and
    • Enhance Constituent Representation by giving elected officials the tools to govern without having to devote inordinate amounts of time to high-dollar fundraising.
  • short video featuring six elected officials who champion public financing as the best solution to address the outsize influence of money in politics, and explain how such systems boosted their own successful campaigns, while making them more responsive to average citizens once in office.

Together with Demos, the Center will also release a policy paper, A Civil Rights Perspective on Money in Politics, which quantifies and analyzes how money in politics exacerbates existing inequalities.

“The wealth gap between white communities and communities of color has grown to its largest size in 25 years, meaning that those who can make large donations to election campaigns are increasingly unrepresentative of the general population,” notes the paper. “These disproportionately white and male donors not only look different than most Americans — they also have different policy preferences. The candidates who succeed in this environment are often more representative of this homogenous donor pool (by demographics and policy outlook) than of their more diverse constituencies.”

Reform Groups Urge Reps to Oppose Bill That Would Open Loophole for Foreign Money

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In a letter sent today, reform groups urged representatives to oppose H.R.5053, Representative Peter Roskam’s bill that would eliminate the requirement for 501(c) groups to disclose their donors to the IRS.

The groups included the Brennan Center for Justice, Campaign Legal Center, Center for Responsive Politics, Common Cause, CREW, Democracy 21, Every Voice, Issue One, League of Women Voters, Public Citizen, Sunlight Foundation, The Rootstrikers Project at Demand Progress and Represent.Us.

The Roskam bill would open the door wide for secret money from foreign donors to be illegally laundered into federal elections through 501(c)(4) and other 501(c) groups. Foreign money cannot be legally spent in U.S. elections, but it can be given to 501(c) groups  and they can spend money in our elections. These groups are not required to disclose their donors publicly, but they are required to make non-public disclosure of their donors to the IRS.

The letter stated:

This disclosure to the IRS is the only protection citizens have to prevent 501(c)(4) and other 501(c) groups being used to illegally spend foreign money in our elections. The fact that 501(c) groups are required to disclose their donors to the IRS means the groups know that donor information is available as an accountability check against illegal conduct.

If donor disclosure to the IRS by 501(c) groups is eliminated, however, as the Roskam bill would do, no one will be in a position to determine if a 501(c) group illegally spent foreign money in our elections – other than the group and foreign donor involved. Any check will be gone and there will be no way to hold a group and foreign donor accountable for illegally spending foreign money in U.S. elections.

The letter concluded:

House members should vote against eliminating the existing check against foreign countries, foreign companies and foreign individuals spending money illegally to influence our elections.

We strongly urge you vote to protect the integrity of U.S. elections by voting against H.R. 5053.

FBI Probe of Governor Over Campaign Finance Underscores Need for Reform

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The FBI is investigating the governor of Virginia for alleged campaign finance violations, multiple news agencies have reported.

According to CNN.com, Virginia Democratic Gov. Terry McAuliffe being investigating ongoing by the FBI, as well as and prosecutors from the Justice Department’s public integrity unit.

The news has advocacy groups renewing their call for campaign finance reform.

Common Cause was one of them.

Here’s what Karen Hobert Flynn, senior vice president for strategy and programs had to say:

“Like everyone who is the subject of a criminal investigation, Gov. McAuliffe carries the presumption of innocence. That said, we saw in the case of former Gov. Bob McDonnell how Virginia’s anything-goes gift and campaign finance laws practically invite corruption. As they prepare to choose a new governor in 2017, Virginians should insist that candidates make campaign finance reform, including limits on contributions from individuals and political committees, a ban on direct donations by corporations and unions, and adoption of a small-dollar donor based public financing system, their top priority.”

More news coverage of the investigation can be found online.

Study Detailing Clout of Wealthy, White Donors in Chicago Politics Has Implications Across U.S.

A study released recently documents the dominance of wealthy whites in financing Chicago elections and makes a powerful case for a citizen-funded election plan that would encourage candidates to focus attention on small dollar donors who more closely reflect the city’s population.

The report, “How Chicago’s White Donor Class Distorts City Policy,” was released by Common Cause, Demos, Reclaim Chicago and People’s Action. It examines the city’s hotly-contested 2015 mayoral race, concluding that more than 90 percent of the money raised by the two leading candidates came in donations of more than $1,000 and that just more than half of the money was provided by out-of-town donors.

Nearly nine out of every 10 of those large-dollar donors were white and almost three-quarters of them make more than $100,000 per year, the report said. In contrast, just 39 percent of Chicagoans are white and only 15 percent earn $100,000 or more annually.

“These findings demonstrate how out-of-balance and out-of-touch with everyday Chicagoans our local government has become,” said Trevor Gervais, lead organizer for Common Cause Illinois. “By virtue of their ability to pour big money into the campaign chests of local leaders, a relative handful of wealthy white donors is able to drown out the voices of African-American, Latino and other residents and drive policy decisions by the mayor and aldermen.

While the study focused on Chicago, Gervais said the findings carry an important message for cities across the country.

“To make local government more representative and amplify the voices of hard-working Chicagoans in every part of the city, we need to pass citizen-funded programs like the Chicago Fair Elections Ordinance,” he asserted. “Systems like the one the ordinance would create have helped rein in the power of big money donors in New York City and states including Arizona, Maine and Connecticut. They’re part of a national movement to fight the power of big money and give us a political system with common sense rules that apply to everyone.”

The Fair Elections Ordinance would provide $6 in public funds for every $1 in contributions of $175 or less collected by candidates for mayor, city clerk, city treasurer and alderman. To qualify for the matching funds, candidates would have to refuse all contributions from political action groups and corporations and refuse donations of more than $500 from individuals doing business with the city.

The matching system would make an individual contribution of $175 worth $1,225 to participating candidates, giving those candidates an incentive to focus their fundraising on small dollar donors.

The study was written by Sean McElwee, a policy analyst at Demos, a New York-based think tank, in collaboration with Brian Schaffner and Jesse Rhodes, two political scientists at University of Massachusetts-Amherst and experts on the issue of money in politics.

Democracy 21 and the Campaign Legal Center Sue the FEC for Failure to Enforce the Law and Protect the Integrity of Democracy

Democracy 21 and the Campaign Legal Center filed a lawsuit recently in the U.S. District Court for the District of Columbia against the Federal Election Commission for dismissing five complaints that CLC and D21 filed with the agency.

The dismissed complaints called for FEC investigation into donors who broke disclosure laws by hiding behind personal Limited Liability Companies  to anonymously make contributions to super PACs.

CLC and D21, over the course of several years, filed complaints with the FEC against these donors for violating the “straw donor” provision of Federal Election Campaign Act. These donors’ anonymous contributions ranged from $857,000 to over $12 million, and several of the donors openly admitted in the media that they had used their personal company for the purpose of hiding their identities from the public. Still, the FEC dismissed all five complaints, after the three Republican commissioners voted not to investigate and sanction these donors.

“This clearly is an agency out of control,” said Larry Noble, general counsel for the Campaign Legal Center, who previously served as general counsel for the FEC. “The agency is now sanctioning the intentional undermining of the integrity of campaign finance disclosure.  Each time the FEC fails to pursue a serious violation of the law, it weakens our democracy and the ability of Americans to know who is truly influencing our elections. It also sends a loud and clear message that those who violate campaign finance laws will face no penalties.”

The Supreme Court has repeatedly recognized that disclosure laws play a vital role in providing the electorate with critical information to make informed choices. Prohibiting the use of straw donors to hide the true source of a contribution is essential to the law.

“LLCs are growing vehicles for laundering dark money contributions into federal elections. Anonymous donors are giving contributions to Super PACs through LLCs, and only the LLCs, not the actual donors, are being disclosed to the public by the Super PACs,” said Fred Wertheimer, president of Democracy 21. “Our FEC complaints and lawsuit are designed to bring an end to these ‘secret money’ schemes before they get completely out of hand and to obtain enforcement of the law in cases that we believe involve clear violations.”

The lawsuit states that in dismissing these complaints, the FEC has “undermined FECA’s purposes, including its goal of promoting transparency in elections and providing the electorate with information about who is speaking to it during elections.” CLC and D21, along with the public, “were deprived of timely information about the sources of the contributions made to the super PACs – information to which they are legally entitled to under FECA.”

The lawsuit calls for the court to find that the FEC’s dismissal of the complaints was “arbitrary, capricious, and an abuse of discretion, and otherwise contrary to the law,” and seeks a judicial order demanding the FEC enforce the law within 30 days.

CFI Announces Web Tool for Tracking Outside Spending in Congressional Primaries

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Independent expenditures in the congressional primaries are now outpacing those in the ongoing presidential primaries.

Consider this: Since April 1st, $13.5 million has been reported spent on congressional primaries, versus just $7.4 million in the presidential primaries.

The Campaign Finance Institute will be tracking independent spending in House and Senate primaries through a primary tracking tool on its website.

It shows candidate receipts and independent spending together for each race, including the aggregate amount each group is spending for and against the candidates. Drilling down to each individual expenditure is also possible.

With the competitive races this past week in Pennsylvania and Maryland, and this week in Indiana, independent spending has been focused in these states and is led by a group of traditional primaries spenders (Women Vote!, US Chamber of Commerce, and Club for Growth Action) and some single candidate Super PACs (Maryland USA, Accountable Leadership, and New Leadership for Ohio).

In an unusual move The Democratic Senatorial Campaign Committee, for example, took sides in the Pennsylvania Democratic Senate primary, spending almost $1.5 million to support Kathleen McGinty over former Rep. Joe Sestak.

In the three previous elections cycles, 2010-2014, the six major party committees did not spend any money on independent expenditures against a member of their own party. In other party spending, the Democratic Congressional Campaign Committee has reported spending $423,528 in the Nebraska 2nd district Republican primary.


The Democratic primary for the open Senate seat in Maryland has seen the most spending of any race so far – $6.7 million. House members Christopher Van Hollen and Donna Edwards are both vying for the right to run in November. Women Vote!, an Emily’s List Super PAC, has lined up with Edwards spending $2.93 million so far. Van Hollen has the Support of the National Association of Realtors ($926,062) and Committee for Maryland’s Progress ($515,518).

Similarly, in Indiana, two sitting Republican House members are squaring off in the Senate primary. The US Chamber of Commerce has spent $1 million in support of Rep. Todd Young in his race against Rep. Marlin Stutzman.

Maryland’s 6th district has seen the most independent spending of any House district so far. All the money has been spent by Maryland USA in the Republican primary. Maryland USA is a Super PAC reportedly set up by the husband of Republican candidate Amie Hoeber.

MD Advocacy Groups Lament Lack of Progress with Good-Government Initiatives

With the 2016 legislative session nearing its close, advocates in neighboring Maryland expressed disappointment that more progress was not made on good government reforms in the past 90 days.

“While the Legislature made some progress this session, particularly on expanding access to voting, overall we saw no meaningful progress on key reforms,” said Jennifer Bevan-Dangel, Common Cause Maryland executive director. “At a time when the public is clamoring for open and honest government and is sick and tired of political duplicity, the lack of action on these issues sends the wrong message.”

Common Cause Maryland works on five areas of reform: voting, redistricting, campaign finance, transparency and ethics. The group praised action by the Legislature to restore voting rights to formerly convicted felons, modernize and expand voter registration, and require audits of the new voting systems after the elections.

They also noted a few discrete reforms that did advance, such as requiring public bodies to post agendas in advance of meetings and closing the loophole that allowed petition campaigns to raise funds without reporting those donations.

However, the legislative session saw no progress on other critical reforms:

  • Reforming the state’s broken redistricting process;
  • Protecting the U.S. Constitution from the unprecedented threat of a runaway conventions
  • Closing campaign finance loopholes that allow dark money to flow through our elections.

“The country wants change on these issues, and this legislative session failed to deliver for Maryland. The people can’t make progress in Congress, and now we find we can’t make meaningful progress in Annapolis,” Bevan-Dangel said.

“While we are keenly disappointed that the state legislative session failed to address so many issues,” she added, “Common Cause Maryland will continue the fight this summer – in the nation’s capital, in our counties, and in summer legislative study.”

Editor’s Note: Fortunately, a grass-roots movement for redistricting reform in Pennsylvania is underway. To learn more about the movement, or to sign a petition calling for a change in the way the Keystone State draws its political maps, click here.

 

Did Clinton-DNC Joint Fundraising Efforts Break Campaign Finance Law?

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As election 2016 continues, campaign finance has again been an issue of contention among candidates.

U.S. Sen. Bernie Sanders’ presidential campaign on Monday questioned “serious apparent violations” of campaign finance laws under a joint fundraising deal between Hillary Clinton’s campaign and the Democratic National Committee – a story highlighted in The Atlantic.

The dealings were detailed in a letter from Brad Deutsch, the attorney for Sanders’ campaign, to U.S. Rep. Debbie Wasserman Schultz, the chair of the DNC. The letter questioned whether the Clinton presidential campaign violated legal limits on donations by improperly subsidizing Clinton’s campaign bid by paying Clinton staffers with funds from the joint DNC-Clinton committee.

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, the Sanders campaign said, 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, the Sanders campaign alleges, “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 outlays “have grown to staggering magnitudes” and “can no longer be ignored,” Deutsch added.

The expenditures on advertising and fundraising are at best “an impermissible in-kind contribution from the DNC and the participating state party committees” to Clinton’s presidential campaign, the letter said. “At worst, using funds received from large-dollar donors who have already contributed the $2,700 maximum to HFA [Hillary for America] may represent an excessive contribution to HFA from these individuals.”

In addition, the joint committee has paid the Clinton campaign committee $2.6 million ostensibly to “reimburse” the Clinton presidential campaign staff for time spent running the joint committee. The unusual arrangement, Deutsch said, “raises equally serious concerns that joint committee funds, which are meant to be allocated proportionally among the participating committees, are being used to impermissibly subsidize HFA through an over-reimbursement for campaign staffers and resources.”

“While the use of joint fundraising agreements has existed for some time — it is unprecedented for the DNC to allow a joint committee to be exploited to the benefit of one candidate in the midst of a contested nominating contest,” said Jeff Weaver, Sanders’ campaign manager.

To read the letter, click here.