On the phone Gary told me the DNC had needed a $2 million loan, which the campaign had arranged.
“No! That can’t be true!” I said. “The party cannot take out a loan without the unanimous agreement of all of the officers.”
“Gary, how did they do this without me knowing?” I asked. “I don’t know how Debbie relates to the officers,” Gary said. He described the party as fully under the control of Hillary’s campaign, which seemed to confirm the suspicions of the Bernie camp. The campaign had the DNC on life support, giving it money every month to meet its basic expenses, while the campaign was using the party as a fund-raising clearinghouse. Under FEC law, an individual can contribute a maximum of $2,700 directly to a presidential campaign. But the limits are much higher for contributions to state parties and a party’s national committee.
Individuals who had maxed out their $2,700 contribution limit to the campaign could write an additional check for $353,400 to the Hillary Victory Fund—that figure represented $10,000 to each of the 32 states’ parties who were part of the Victory Fund agreement—$320,000—and $33,400 to the DNC. The money would be deposited in the states first, and transferred to the DNC shortly after that. Money in the battleground states usually stayed in that state, but all the other states funneled that money directly to the DNC, which quickly transferred the money to Brooklyn.
“Wait,” I said. “That victory fund was supposed to be for whoever was the nominee, and the state party races. You’re telling me that Hillary has been controlling it since before she got the nomination?”
Gary said the campaign had to do it or the party would collapse.
“That was the deal that Robby struck with Debbie,” he explained, referring to campaign manager Robby Mook. “It was to sustain the DNC. We sent the party nearly $20 million from September until the convention, and more to prepare for the election.”
Former Democratic party leader Donna Brazile called the Hillary Clinton campaign’s takeover of party fundraising a “cancer.” Writing in Politico Thursday, Brazile said it “broke my heart” to discover that her predecessor as party chair had given the Clinton campaign power over the Democratic National Committee’s “finances, strategy, and all the money raised” during her primary battle with Vermont Independent Sen. Bernie Sanders.
Brazile inherited the DNC chair position from Florida congresswoman Debbie Wasserman Schultz, who handed the Clinton campaign keys to the party fundraising apparatus through a joint fundraising group called the Hillary Victory Fund: an agreement between the Clinton campaign, the DNC and 32 state parties to raise campaign funds together. The power of that agreement, which effectively allowed Clinton to avoid campaign limits by funneling donations through state parties, was a direct result of a split 2014 Supreme Court decision in which the court’s Chief Justice John Roberts called worries about such arrangments “hypothetical” and “divorced from reality.”
But campaign finance experts say the scenario, far from being hypothetical, may be the new political reality.
“This situation shows that if anyone is divorced from reality, it was the chief justice in assuming they wouldn’t take advantage of this,” Stephen Spaulding, chief of strategy and external affairs for Common Cause, a non-partisan government watchdog group, told International Business Times.
The case in question is McCutcheon v. FEC, a suit brought by Shaun McCutcheon, a Republican activist from Alabama. The Supreme Court ruled in his favor, striking down a federal limit on the total amount individuals could give to parties, candidates and committees each election cycle, which at the time was $123,300.