Amotion to rule that the Oklahoma Democratic Party violated joint fundraising regulations when it received millions from the Hillary Victory Fund in 2016 and then transferred that money to the Democratic National Committee (DNC) failed in the FEC today. This is one of a number of times that FEC Chair Ellen Weintraub has tried to investigate issues involving the Hillary Victory Fund and the Trump Victory Fund from 2016, but the investigations have not gone far due to opposing votes from other FEC members.
Concerns have surfaced alleging that the Donald Trump and Hillary Clinton campaigns in 2016 “exploited” joint fundraising committees to raise millions in excess of individual contribution limits. The Commission closed its files on the investigations on May 31, and Chair Ellen L. Weintraub wrote that she couldn’t do more as long as Republican FEC colleagues weren’t on board.
On June 20, 2019, an open meeting of the FEC addressed an audit memorandum for the Oklahoma Democratic Party. Weintraub attempted to add a joint fundraising allegation to the audit, which would have found that the Oklahoma Democratic Party had violated fundraising regulations when it received millions from the Hillary Victory Fund and then transferred those millions to the DNC. Her amendment failed by a 2-2 vote, and the original memo passed without the join fundraising finding. You can watch the whole discussion in the video below, about two minutes in.
Weintraub said: “I put in an objection so I could make a motion to add a joint fundraising finding to this audit. This audit … is one of a number that raises the same issue. The last time this came up it was a little bit hard to talk about it because it relates to an issue that was also present in a couple of enforcement matters which at that time had not been made public; they have been now: involving both the Hillary Victory Fund and the Trump Victory Fund. Both of the presidential campaigns in 2016 set up these massive joint fundraising committees and in a number of instances money that went into the state party committee accounts as a result of those events immediately turned around and went back to the national party committee, including money that was given by donors who had already maxed out to the National Party committee. I think that was a circumvention of the contribution limits, so I am hoping to support a motion on to add a finding on that the Oklahoma Democratic Party violated the joint fundraising regulations…”
Commissioner Steven T. Walther introduced the motion, saying: “I moved to add a new finding that the Oklahoma Dem Party violated the joint fundraising regulations at 11 CFR Section 102 17c when it received … $3,13,100 in net proceeds from the Hillary Victory Fund joint fundraising committee and on the same day transferred $3,03,100 to the Democratic National Committee.”
The motion ultimately failed 2-2. You can read the agenda from the FEC’s June 19 meeting here.
This has been part of a wider issued that Weintraub has wanted the FEC to investigate. Allegations first surfaced in 2016. In May 2016, Politico reported that Clinton’s fundraising wasn’t leaving much money for state Democratic parties. The Hillary Victory Fund was a joint fundraising committee made up of the DNC, Clinton’s campaign, and 32 state parties. It was meant to help rebuild state parties, with money it raised being divided among state parties and Clinton’s campaign. But Politico reported at the time that the Hillary Victory Fund had transferred $3.8 million to state parties and 88 percent of that ($3.3 million) was transferred by a Clinton campaign staffer within days to the DNC. Meanwhile, Politico reported the Hillary Victory Fund also transferred $15.4 million to Clinton’s campaign and $5.7 million to the DNC.
Some experts were concerned that this was a unique way to bypass contribution limits, Politico reported at the time. It also might have hurt state parties. One state party official told Politico that the Fund was a “one-sided benefit.”
At the time, The Atlantic reported that Bernie Sanders’ campaign used the news to accuse Clinton of looting funds meant for state parties in order to avoid fundraising limits. His campaign issued a press release at the time voicing this concern. The press release is now deleted from his website, but you can still find an archive here. Sanders himself isn’t quoted in the press release. Instead, then-campaign manager Jeff Weaver makes the statements, including: “We think the Clinton campaign should let the state parties keep their fair share of the cash… Secretary Clinton has exploited the rules in ways that let her high-dollar donors like Alice Walton of Wal-Mart fame and the actor George Clooney and his super-rich Hollywood friends skirt legal limits on campaign contributions.”
According to the most recent FEC statements, allegations have been made that both the Hillary Victory Fund and the Trump Victory Fund may have been circumventing limits by taking advantage of loopholes from a Supreme Court ruling in 2014. But these complaints have since been closed. You can see the complaints posted about this on the FEC’s website here. Both files have since been closed. In MURs 7304 and 7331, the complainant alleges that “joint fundraising conducted by HVF (Hillary Victory Fund), HFA (Hillary for America), the DNC, and 38 state party committees resulted in millions of dollars in excessive contributions being funneled through the state party committees to the DNC in violation of the Act’s earmarking regulations and prohibition against making contributions in the name of another. The complaint further alleged that the DNC then contributed those funds to HFA in excess of the Act’s limits.”
Another statement about the Trump Victory Fund, MUR 7339, reads: “The complaint alleged that joint fundraising conducted by Trump Victory, the RNC, and 21 state party committees was used to funnel millions of dollars in contributions that the RNC ultimately used to support the Trump Committee, in violation of the Act’s contribution limits, earmarking provisions, and prohibition on contributions in the name of another.”
Both files were closed on May 31, 2019, and FEC Chair Ellen L. Weintraub issued a Statement of Reasons explaining what happened. You can read the full statement below.
In 2016, the presidential campaigns of both Donald J. Trump and Hillary R. Clinton exploited joint fundraising committees to raise millions of dollars in contravention of individual contribution limits. These campaigns used this tactic to enable wealthy megadonors to write checks worth hundreds of thousands of dollars, avoiding the contribution limits then in effect.”
She notes that this happened because of the Supreme Court’s 2014 plurality decision in McCutcheon v. FEC, where it struck down aggregate contribution limits. She said these limits were supposed to prevent parties from bypassing individual contribution limits. The FEC warned at the time that individuals could write multimillion-dollar checks to a joint fundraising committee, which would then be funneled to a narrow set of candidates, if the law was struck down by the Supreme Court.
She wrote: “With a remarkable lack of prescience, four Justices on the Supreme Court discounted this possibility… They could not envision a number of state party committees joining such an endeavor. Yet the danger of a “loophole measured in the millions” arose almost as soon as the ink dried on the McCutcheon decision.9 That danger materialized in 2015 when the first of these super-joint-fundraising committees was formed.”
She said that both Trump and Clinton’s joint fundraising committees participated in bypassing limits. She wrote:
Other troubling facts suggest that the state party committees involved were merely passthroughs. The money was routed through the state parties on a quick trip to the national party committees, which then used the money for coordinated expenditures benefitting their respective presidential candidates.”
However, Weintraub noted that she had voted to pursue a deeper investigation into this issue, so “individual contribution limits are not rendered meaningless.” She wrote: “My Republican colleagues, however, have blocked the first enforcement matter with the potential to shed light on the circumvention schemes forecast in McCutcheon.”
She concluded: “These presidential joint fundraising committees have eviscerated the individual contribution limits. And both sides will continue doing it so long as Republican FEC commissioners refuse to stop them.”