DNC Leak Elucidates Multi-Million $ Clinton/DNC Money Laundering of Down-Ticket Funds to Finance Clinton Campaign

DNC Leak Shows Mechanics of a Slanted Campaign

Taibbi writes: “As is sadly the case with most political stories these days, whether or not you care about the so-called ‘DNC leak’ probably depends on which candidate you supported in the primaries.”

Democratic presidential candidate Hillary Clinton and former U.S. president Bill Clinton greet supporters during a primary night gathering on April 26, in Philadelphia. (photo: Justin Sullivan/Getty Images)
Democratic presidential candidate Hillary Clinton and former U.S. president Bill Clinton greet supporters during a primary night gathering on April 26, in Philadelphia. (photo: Justin Sullivan/Getty Images)

By Matt Taibbi, Rolling Stone

26 July 16

Documents released by Wikileaks detail how the DNC worked with the Clinton camp to downplay a key story about questionable fundraising

s is sadly the case with most political stories these days, whether or not you care about the so-called “DNC leak” probably depends on which candidate you supported in the primaries.

If you supported Hillary Clinton, it probably won’t bother you that the Democratic National Committee is revealed in these documents to have essentially acted as an arm of the Clinton campaign during the contested primary season

Most people guessed at this anyway. But it wasn’t until these documents were dumped last week under mysterious circumstances that the extent to which the party both advocated for Hillary and against her opponent Bernie Sanders was made plain.

Nowhere is the discrepancy on greater display than in an episode involving the DNC’s reaction to a May 2nd article by Politicoreporters Ken Vogel and Isaac Arnsdorf, which itself pointed at a backdoor advantage for the Clinton campaign.

The exchanges over this Politico story were barely mentioned in the wake of the DNC leak, except by right-wing media that shortsightedly dinged Vogel for submitting a draft of his piece of the DNC before publication, suggesting “collusion.”

Vogel maybe shouldn’t have sent a whole copy for review, but his intent wasn’t to give the DNC or Hillary a break – far from it. It seems pretty clear that he wanted to make sure he didn’t miss with a piece full of aggressive, original reporting that took on a very powerful target.

In the piece, headlined “Clinton fundraising leaves little for state parties,” Vogel and Arnsdorf discovered an anomaly in Federal Election Commission filings.

A joint fundraising committee called the Hillary Victory Fund, ostensibly designed to funnel money from rich donors to local party committees, had in fact been used as a cut-out to funnel money back to the national party and the Clinton campaign.

As an example, take couples who paid or raised $353,400 to sit at a table with George Clooney, a sum that Clooney himself called an “obscene amount of money.” The figure represented the maximum allowable donation given the structure of the Hillary Victory Fund, a joint venture between the Clinton campaign, the DNC and 32 state committees.

Donors can give a maximum of $5,400 per election cycle to Hillary’s campaign, $33,400 per year to the DNC, and $10,000 per year to each of the 32 state committees in the fund.

If you assumed that the Clooney guests had already given their maximum $5,400 to the Clinton campaign, that left just over $353,000 for the DNC and the committees.

But Vogel and Arnsdorf found that less than 1 percent of the $61 million raised by the Hillary Victory Fund went to the state committees.

Actually it’s better to say that only 1 percent of the money “remained” with the committees. In talking to state sources, thePolitico reporters found that large sums of money would sometimes appear briefly in state committee coffers, and disappear just as quickly, and then just as quickly be deposited into DNC accounts.

The money sometimes came and went before state officials even knew it was there. Politico noted that the Victory Fund treasurer, Beth Jones, is also the COO of the Clinton campaign.

This was problematic at the very least because large sums of money were going to the DNC that came from donors who in many cases had already given the maximum amount to the DNC.

Vogel-Arnsdorf also noted that of the $23.3 million spent directly by the fund, most “had gone toward expenses that appear to have directly benefited Clinton’s campaign, including $2.8 million for ‘salary and overhead’ and $8.6 million for web advertising that mostly looks indistinguishable from Clinton campaign ads.”

The context was significant. Technically, Sanders raised more money than Hillary Clinton in each of the first three months of this year. Sanders early in the year also had a massive advantage over Clinton among small donors, raising $67 million from them through January 31st, compared to less than $22 million for Clinton during the same period.

What the Vogel-Arnsdorf story pointed to, then, was the Clinton campaign – with the aid of the DNC – using large-money donors like Clooney’s friends to get around a fundraising shortfall among small donors.

This is also significant because one of Clinton’s campaign talking points throughout emphasized that she was aiding down-ballot Democrats, while Sanders was not.

Even the likes of Clooney thought the money was going to the committees. “The overwhelming amount of the money that we’re raising,” the actor told Meet the Press, “is not going to Hillary to run for president, it’s going to the down-ticket.”

Politico‘s “1 percent” report put all of this in question.

In the leaked DNC documents, we see remarkable exchanges between high-ranking officials, talking about how best to deal with the potential scandal.

In the most bizarre and darkly comic moment, DNC Communications Director Luis Miranda emails his colleagues about which local Democratic official to put on Morning Joe to rebut the story.

Miranda asks DNC Deputy Policy Director for State Party Programs Maureen Garde, then-DNC National Political Director Raul Alvillar, and DNC CEO Amy Dacey if they should put Indiana State Chair John Zody on the show.

But Miranda had a problem. The Vogel-Arnsdorf story had quoted a state official and a party operative who were pissed about their disappearing money.

Since those complaining were unnamed, they could be anyone. Even Zody! In which case, putting him on TV might not be a good idea.

Miranda, anxious to know if Zody is “in a good place” on the issue, writes (emphasis mine):

“From: Miranda, Luis
Sent: Monday, May 02, 2016 4:33 PM
To: Maureen Garde; Alvillar, Raul; Dacey, Amy
Subject: FW: Can we use John Zody for TV tomorrow?

“Do we know if the Indiana State Chair is in a good place on the Victory Fund before we book them? Any concerns with helping them get on air? Given the Sanders claim of money laundering I don’t want to help book if they’re one of the parties that are complaining off the record.”

To which Alvillar responds:

“I just talked to him last week. He didn’t mention anything to me. Let us check really quick.”

What this exchange shows is that the DNC officials, hilariously, didn’t know which local chiefs they’d screwed to the point of off-the-record revolt with their Victory Fund maneuvers.

Later, they discussed how to deal not with Politico, but the fact-checking site PolitiFact. The site had earlier rated George Clooney’s claim about most of the money going down-ticket “mostly true.”

But after the Vogel-Arnsdorf story, PolitiFact reporter Eugene Emery was understandably exercised and reached out to Miranda for an explanation, hinting that he was considering re-doing his rating.

The leaked papers show the DNC officials consulting with the Clinton campaign about how to deal with the meddlesome Emery.

“I spent about half hour on the phone with Gene pushing back on the Politico story,” an exasperated Miranda writes, to Clinton campaign spokesman Josh Schwerin.

Miranda added: “He’s hung up on the notion that if a state party chair wants to keep some of that money, they don’t get to decide.”

Schwerin responds, “He seems to think the DNC has nothing to do with electing down ballot Dems which is just crazy.”

In fact, as he says this week, “crazy” Gene Emery was “hung up” on a very reasonable question.

“I just kept asking them,” says Emery, “what are the odds that all of these committees would get this money and turn right around and send it all back to the DNC? They wouldn’t keep a thousand dollars? Coffee money even?”

The campaign never really answered that question, and still hasn’t.

In any case, Schwerin later went on to write: “I’m speaking with the editor tomorrow before they post anything.”

To its credit, PolitiFact deflected the “pushback” and ultimately downgraded their rating of Clooney’s claim to “half-true.”

What’s patently obvious from these emails is that there was virtually no distinction between DNC and Clinton campaign officials when it came to the handling of this media problem. They were all on the same team, working in tandem to try to talk down the likes of Vogel and Emery.

Meanwhile, the Sanders campaign is treated as an enemy. After Vogel’s story came out, Sanders campaign chief Jeff Weaver sent DNC Treasurer Andrew Tobias a letter asking him to sign a petition calling for the state committees to receive “all the money allowable” from the Victory Fund.

Weaver, with pointed irony, signs his letter:

“In solidarity,
Jeff Weaver”

Tobias circulates this letter to other DNC staffers, saying, “Seems awfully unfair and inaccurate?”

Soon after, communications chief Miranda circulates a note to staffers asking them to search “if there’s any coverage of Bernie Sanders camp calling the victory fund ‘money laundering.'”

As was the case with DNC officials teaming up to look for a negative “narrative” about how Bernie Sanders “never got his act together,” and pondering the possibility of a negative story about his religion, the DNC actively searched for a negative angle on the Sanders reaction to the Politico piece within hours after its release. They focused on the use of the term “money laundering.”

In fact, the use of the term first came from Democratic Party state fundraising sources in the Politico story.

As Vogel and Arnsdorf wrote, “[state fundraisers] worry that participating states… could see very little return investment from the DNC or Clinton’s campaign, and are essentially acting as money laundering conduits for them.”

When the Sanders campaign put out a press release citing those quotes, the DNC complained that the Sanders camp was jumping the shark in its language, and pointed reporters toward a legal expert who pooh-poohed the notion that the law had been broken.

By evening that day, news outlets were describing this not as an exposé about the DNC and Clinton, but as an inside-baseball fight between the Sanders and Clinton camps.

“Clinton and Sanders spar over joint fundraising efforts,” wrote one CNN headline.

That CNN story even added language that “a Clinton campaign aide refuted some of Politico’s report Monday.” This was despite the fact that the “refuting” amounted to a promise that more money would reach the state parties in upcoming months.

What does it all mean? If you’re a Clinton fan, probably nothing.

To anyone else, it shows that the primary season was very far from a fair fight. The Sanders camp was forced to fund all of its own operations, while the Clinton campaign could essentially use the entire Democratic Party structure as adjunct staff. The DNC not only wasn’t neutral, but helped with oppo research against Sanders and media crisis management.

DNC chief Debbie Wasserman Schultz was forced to resign as a result of this mess, which exposed to Sanders voters the extent to which they were viewed organizationally as annoyances to be managed. The immediate question going forward for the party is whether the two camps can put aside their differences in time to defeat the more-than-a-little-scary Donald Trump.

But down the road, someone will have to address the problem of a Democratic Party structure that effectively had no internal advocates for a full 43 percent of its voters. As we’ve seen with the Trump episode on the other side, people don’t much like having to fight against the party claiming to represent them.

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