Source Check

Published — November 7, 2016

Clinton’s super-sized fundraising machine pushes legal boundaries

Hillary Clinton. Andrew Harnik/AP

Democratic nominee’s group collects six-figure checks, runs online ads

A version of this story was co-published with NBC News.

Introduction

Pay attention to the fine print and you’ll see that some of the online messages touting Democratic presidential nominee Hillary Clinton are paid for by “Hillary for America,” while others are sponsored by the “Hillary Victory Fund.”

How powerful is this two-word change? It means the difference between ads funded by donors who may legally give Clinton up to $2,700 — or by those who may give hundreds of thousands of dollars.

Joint fundraising committees, often called “victory funds,” are not new in federal politics. Candidates routinely raise money through these collaborative operations that, by design, split the funds they collect among a number of beneficiaries, such as national and state party committees, as well as the candidate’s own campaign.

But instead of just transferring its cash to the signatories of the joint fundraising agreement, the Clinton campaign is also using a significant amount of the money the Hillary Victory Fund collects to finance pro-Clinton advertising.

This is innovative, to say the least. But it’s also worrisome to campaign finance reformers who see it as a way to shift costs onto groups funded by big donors, thereby evading campaign contribution limits.

And in that respect, critics see Clinton’s big-money operation as a way for well-heeled donors to better access and influence the woman who may be the next president of the United States.

Larry Noble, general counsel at the nonpartisan Campaign Legal Center, which advocates for stricter campaign finance regulations, told the Center for Public Integrity that Clinton’s team had taken the interpretation of a joint fundraising committee “to another level.”

Videos produced by the Hillary Victory Fund, and appearing online on websites like YouTube and Twitter, “are basically campaign ads,” Noble said. “This is a problem.”

Democratic operatives, however, argue that Clinton and her party allies should use all available financial weapons to fight Republicans.

Josh Schwerin, a spokesman for the Clinton campaign, told the Center for Public Integrity that online videos help “give people a reason to donate” to the Hillary Victory Fund, which he called “critical to funding the coordinated campaigns that are helping elect Democrats up and down the ballot.”

Pro-Clinton videos sponsored by Hillary for America, Clinton’s official campaign committee, and the Hillary Victory Fund, a joint fundraising group allowed to collect six-figure checks, are almost indistinguishable to casual viewers. Some campaign finance reformers say Clinton is pushing legal boundaries. (YouTube)

The ads

To the average viewer, the online videos sponsored by the Hillary Victory Fund are almost indistinguishable from those sponsored by Hillary for America, the official name of Clinton’s presidential campaign committee, which is legally allowed to accept no more than $2,700 per donor.

The ads have featured testimonials from Americans across the country as well as updates from campaign staffers and excerpts of remarks made by Clinton and her Republican rival, Donald Trump.

One such video features New York resident Mae Wiggins, an African-American woman. She recalls how, in 1963, she was “denied an apartment in the Trump buildings based on the color of my skin.” The Department of Justice eventually sued the Trump organization, which settled the lawsuit without admitting guilt.

The video, which runs more than three minutes, also feature interviews with Clinton’s running mate, Sen. Tim Kaine of Virginia, and civil rights activist Eleanor Holmes Norton, now the District of Columbia’s delegate in the U.S. House of Representatives.

In the video, Wiggins, who struggles to hold back tears, goes on to say that Trump is “not worthy of becoming president of this country.”

Another features Monique Corzilius Luiz, who, as a 3-year-old in 1964, starred in President Lyndon Johnson’s infamous “Daisy” political ad. She expresses dismay at what she considers Trump’s cavalier attitude toward nuclear proliferation, and she encourages viewers to vote for Clinton.

Yet another video features Clinton campaign press secretary Brian Fallon pushing back against the recent news that the FBI had discovered new e-mails that appear “to be pertinent” to its earlier investigation into Clinton’s handling of classified emails on a private server during her tenure as secretary of state.

One thing all of the Hillary Victory Fund videos have in common? The final seconds of the ads show a fundraising message, asking viewers to text the campaign to make a donation to the Hillary Victory Fund.

This is important, campaign finance experts say, because joint fundraising committees are allowed to use the money they collect to pay for their own fundraising costs.

But these online videos are not your typical solicitations.

Paul S. Ryan, vice president of policy and litigation at Common Cause, told the Center for Public Integrity that if you are “not a lawyer or a journalist,” then “you would just perceive it to be a candidate campaign ad.”

Why is that potentially problematic?

“Under a strict reading of the law, candidate campaign ads should, and must, be paid for with money raised under the low candidate contribution limit,” said Ryan. “A joint fundraising committee is a way for the Clinton campaign to offload campaign costs onto others.”

“A joint fundraising committee is a way for the Clinton campaign to offload campaign costs onto others.”

Paul S. Ryan, vice president of policy and litigation at Common Cause

Money in

Campaign finance records show that the Hillary Victory Fund raised more than $473 million from its inception on Sept. 10, 2015, through Oct. 19, 2016, the date covered by its most recent report.

By contrast, President Barack Obama’s 2012 victory fund raised about $456 million, and his joint fundraising operation in 2008 pulled in about $198 million.

One reason Clinton has been able to collect so much cash: Donors are able to give larger sums than they were in either 2012 or 2008.

In 2014, in a case known as McCutcheon v. Federal Election Commission, the U.S. Supreme Court struck down the aggregate campaign contribution limit that had prohibited individuals from giving more than about $123,000 combined to all federal candidates, parties and political action committees during a two-year election cycle.

The ruling freed individuals to donate the legal maximum to as many candidates, parties or PACs as they desired.

Therefore, individual donors may contribute hundreds of thousands of dollars directly to the Hillary Victory Fund, which raises money for Clinton’s presidential campaign as well as the Democratic National Committee and state parties in 38 states. A handful have even given the Hillary Victory Fund more than $750,000, according to campaign finance records.

When the McCutcheon decision came down, Clinton campaign manager Robby Mook reacted, in part, by saying, “Gotta have the state parties in the joint — so much money on the table,” according to hacked e-mail records that have been released by WikiLeaks.

Top donors to the Hillary Victory Fund

Donor name Location Total given
Avie Glazer FL $769,500
Jeffrey Katzenberg CA $769,500
Fred Eychaner IL $767,243
Barbara Lee MA $766,800
Cheryl Saban CA $766,800
Haim Saban CA $756,800
Mary Quinn Delaney CA $753,300
Jay Snyder NY $748,800
S. Donald Sussman NY $736,800
Philip Munger NY $723,400
Susie Tompkins Buell CA $722,560
Laure Woods CA $714,100
Sean Parker CA $714,100
Herbert Sandler CA $706,800
J.B. Pritzker IL $706,800
Mary Kathryn Pritzker IL $706,800
Alexandra Parker CA $685,300
Alice Walton AR $669,500
Patricia Stryker CO $666,800
Jo Ann Kaplan CA $625,750
Charles Kaplan CA $623,204
Wayne Jordan CA $621,000
Imaad Zuberi CA $615,100
Jon Stryker NY $581,500
Peter Kellner United Kingdom $515,752
James Pugh FL $513,400
Sonya Campion WA $491,100
Thomas Campion WA $491,100
Paul Cejas FL $483,400
Merle Chambers CO $466,800
Puyallup Tribe Of Indians WA $463,400
Paul Boskind NY $461,800
Alfonso Fanjul FL $450,302
Bren Simon CO $450,000
Vaughn Vennerberg TX $449,501
Alba Tull CA $449,500
Thomas Tull CA $449,500
William Freeman TN $447,322
Eugene Ludwig DC $446,800
Gladys Cofrin FL $446,800
Arthur Rabin NY $444,400
Timothy Gill CO $443,400
Maria Kellner United Kingdom $437,000
Scott Miller CO $425,000
Rishi Shah IL $419,400
Calvin Klein NY $418,800
Seth Macfarlane CA $416,700
Amy Rao CA $416,401
Alexander Soros NY $416,100
Barry Silverstein OR $416,100
Cantey Ergen CO $416,100
Cari Tuna CA $416,100
Carrie Walton Penner CA $416,100
Casey Wasserman CA $416,100
Christopher Sacca CA $416,100
Constance Milstein DC $416,100
Craig Ramsey CA $416,100
Craig Silverstein CA $416,100
Crystal Sacca CA $416,100
Cynthia Secunda NY $416,100
David Boies NY $416,100
Dominick D’Alleva NY $416,100
Dustin Moskovitz CA $416,100
Eng Goi NY $416,100
George Marcus CA $416,100
Henry Howard FL $416,100
Irwin Jacobs CA $416,100
Jennifer Duda CA $416,100
Joan Klein Jacobs CA $416,100
Katherine Rudin NY $416,100
Margaret Gupta VA $416,100
Marieke Rothschild CA $416,100
Marilyn Katzenberg CA $416,100
Marius Meland NY $416,100
Mary Obelnicki CA $416,100
Matthew Cohler CA $416,100
Matthew Pritzker IL $416,100
Patricia Crown IL $416,100
Pia Pernil CA $416,100
Sam Rawlings Walton AR $416,100
Sheila Davis CA $416,100
Sheryl Sandberg CA $416,100
Stephen Robert NY $416,100
Thomas Secunda NY $416,100
Trudy Silverstein OR $416,100
Vera Wang NY $416,100
Elizabeth Simons CA $416,100
Anne Earhart CA $416,000
Christopher Catrambone Malta $416,000
Iris Smith CA $416,000
Jaime Frankfurt NY $416,000
Barry Lang CA $415,050
Janet Lang CA $415,050
Shashikant Gupta VA $415,000
Elizabeth Craven NC $414,909
Ahmad Khawaja CA $413,400
Amy Goldman Fowler NY $413,400
Joseph Field PA $413,400
Kenneth Duda CA $413,400
Laurene Powell Jobs CA $413,400
Lisa Mennet WA $413,400
Morgan Fowler NY $413,400
Patricia Kessler FL $413,400
Rebecca Pohlad MN $413,400
Richard Anderson TX $413,400
Robert Pohlad MN $413,400
Steven Spielberg CA $413,400
Susan Anderson TX $413,400
Barry Diller NY $413,248
Howard Kessler FL $411,100
Lynn Forester De Rothschild NY $410,671
Ana Stoliarova CA $408,698
James Cameron CA $403,400
Marie Field PA $403,400
Michael Bills VA $403,400
J.J. Abrams CA $402,600
Kathleen McGrath CA $402,600
Amber Mostyn TX $401,000
Richard Richman CT $400,133
Michael Gelman MD $400,000

Source: Center for Public Integrity analysis of Federal Election Commission data of donations to the Hillary Victory Fund from Sept. 10, 2015, through Oct. 19, 2016.

To date, 120 donors have contributed at least $400,000 to the Hillary Victory Fund, according to a Center for Public Integrity analysis of campaign finance filings.

Their ranks include Hollywood icons, Silicon Valley visionaries and a plethora of other mega-rich Americans.

Among them:

(*The Center for Public Integrity receives funding from the Open Society Foundations, which George Soros funds. A complete list of Center for Public Integrity funders is found here.)

Some of these deep-pocketed contributors — including Sussman, the Pritzkers and the Sabans — are also major donors to Priorities USA Action, the main super PAC established to help elect Clinton.

For his part, Trump operates a joint fundraising committee with the Republican National Committee that also benefits 21 state Republican parties.

Libertarian presidential nominee Gary Johnson, likewise, operates a joint fundraising group that benefits his longshot campaign as well as two-dozen state-level Libertarian parties.

Money out

About $1 of every $4 the Hillary Victory Fund has raised — about $120 million — has been spent on its own “operating expenditures.”

That includes more than $54 million for what’s described in campaign finance reports as “online advertising.”

At the same time, the Hillary Victory Fund has transferred the majority of the money it’s raised to its designated beneficiaries — more than $266 million, or about 56 percent of its receipts through Oct. 19.

That includes about $139 million transferred to the Clinton campaign and about $55 million transferred directly to the DNC.

Tens of millions of dollars have also been transferred to state Democratic parties, though a sizeable portion of those funds were transferred back to the DNC by the state parties — an arrangement campaign finance watchdogs have said falls into a “gray area” of the law.

Why it matters

If Clinton wins, the people who made the largest contributions to the Hillary Victory Fund are likely to enjoy special access and other perks from a President Hillary Clinton.

And regardless of whether she wins or loses on Election Day, Clinton’s joint fundraising operation will have a legacy of redefining the roles of such groups in presidential elections.

Matthew Sanderson, a Republican lawyer at the Washington, D.C., firm Caplin & Drysdale, predicted that there will be “more and more advertisements” structured in a fashion similar to how the Hillary Victory Fund designed its barrage of online videos this year.

He said candidates have a “a natural inclination” to find ways to spend funds directly out of a joint fundraising operation, especially as they have “ballooned in size.”

Ryan, of Common Cause, agreed.

“My prediction is that these joint fundraising committees will become bigger and more sophisticated,” he said.

“Super joint fundraising committees raising six-figure checks,” Ryan added, “are now the new normal in presidential campaigning.”

He continued: “I think we’re seeing just the beginning of the tip of the iceberg.”

Chris Zubak-Skees contributed to this report.

Read more in Money and Democracy

Share this article

Join the conversation

Show Comments

Leave a Reply

avatar
  Subscribe  
Notify of