Clinton’s Down Balloting Sleight of Hand Slightly Better than Money Laundering

April 4, 2016 by Barbara With

The landmark 2014 Supreme Court decision McCutcheon v. Federal Election Commission has effectively allowed political donations to become the equivalent of money laundering, a scheme to make the proceeds of a crime appear to have been derived from a legitimate source.

Bernie Sanders has been criticized recently for not “down-balloting,” the practice of  fundraising for the national party to help state and local candidates win elections.

Rachel Maddow recently claimed that Hillary Clinton has been fundraising for down-ballot Dems, and wondered if Sanders would also contribute to the Democratic National Committee for this reason.

“We’ll see,” Sanders said. “Right now, our focus is on winning the nomination.”

Last December, the Alaskan Dispatch News reported that donations made to the Hillary Victory Fund by Clinton supporters for down-balloting within the state were effectively donated back to the DNC:

The party, in a monthly report filed Friday with the Federal Election Commission, said it raised $43,500 from the Hillary Victory Fund, with $10,000 donations from billionaires, including hedge fund manager S. Donald Sussman and Hyatt hotel heir J.B. Pritzker.

In the same report, the Alaska Democratic Party said it transferred an equal amount of money, $43,500, to the Democratic National Committee — a move that, while legal, helps to effectively “obliterate” federal limits on donations to the national committee, according to one campaign finance expert.

The Hillary Victory Fund is a PAC that has allegedly made deals with state-level Democrats to donate the down-ballot donations back to the DNC that then go to Clinton’s campaign. Funds raised through promises of down-balloting were meant to be divided between the state candidates and Clinton. Numerous reports, like that from Alaska, show that what is actually happening could be considered a high-level confidence trick, designed to effectively allow her billionaire donors to bypass campaign donation limits.

The 2014 Supreme Court decision would allow for such clever coordination of campaign donations. McCutcheon v. Federal Election Commission challenged Section 441 of the Federal Election Campaign Act (FECA) which imposed a limit on contributions an individual can make over a two-year period to national party and federal candidate committees. By a vote of 5-4, the Court ruled the limits were unconstitutional and overturned the aggregate federal campaign contribution limits. Individual campaign contributions were unchanged at $2,600 per election.

Chief Justice John Roberts wrote, “The government may no more restrict how many candidates or causes a donor may support than it may tell a newspaper how many candidates it may endorse.” Justice Thomas wished to abolish all campaign contribution limits.

Those dissenting—Justices Breyer, Ginsburg, Sotomayor and Kagan—argued that the decision “creates a loophole that will allow a single individual to contribute millions of dollars to a political party or to a candidate’s campaign. Taken together with Citizens United v. Federal Election Comm’n, 558 U. S. 310 (2010), today’s decision eviscerates our Nation’s campaign finance laws, leaving a remnant incapable of dealing with the grave problems of democratic legitimacy that those laws were intended to resolve.”

In January 2016, the Bangor Daily News reported another instance of Clinton donors using the state campaign fund to get around campaign finance limits. Several millionaires and billionaires donated to the State funds after reaching the individual limits. Those funds were then turned around and given back to DNC by the State party on behalf of Clinton:

But all the contributions haven’t stayed in Maine, or any of the other state Democratic parties to which Hillary Victory Fund donations have been funneled. Federal Election Commission reports show that the two October and November transfers totaling $39,000 from the Hillary Victory Fund to the Maine Democratic Party each sat for less than 48 hours with the party before the exact same amounts were transferred to the Democratic National Committee.

FECA was enacted to prevent the moving around of money between party committees or PACs so a donor could give more than their limit to a single candidate or party committee. Justice Alito  argued that this was “wildly hypothetical.”

But Paul Blumenthal of the Huffington Post reports that what was once a hypothetical, is now a reality, taking place with the DNC, state parties, and the Hillary Victory Fund.