The Democratic Party is committed to bringing “an end to our broken campaign-finance system.” But until then, Team Blue is gonna smuggle as much big-donor money through the system’s gaping loopholes as it possibly can.
In July, the Democratic National Committee raised $32 million, a haul it credited to the “energy and excitement” of the party’s grassroots. But a new report from Bloomberg suggests that the “energy” of the DNC’s most cunning campaign-finance lawyers produced no small share of that sum.
At least $7.3 million of the DNC’s July total came from donors who had already contributed the maximum $33,400 to the committee, the site found. And yet, the way the DNC went about extracting those extra millions makes its flaunting of campaign-finance limits 100-percent legal.
Here’s how the scheme works: Individual donors are allowed to give a maximum of $2,700 to the Clinton campaign; $33,400 to the DNC; and $10,000 to any individual state party.
Now, the Democratic Party in states like Wyoming, Idaho, and Utah doesn’t have a whole lot of competitive races for hedge-fund Democrats to bankroll. But what they do have is the legal right to transfer unlimited amounts of money to the national party, without disclosing the source of those funds. Thus, the Hillary Victory Fund — the joint fundraising committee set up by Clinton and the DNC — can direct maxed-out donors’ money into these state parties, and then have the state parties immediately transfer those funds to the DNC.
This allows the Democrats to milk their donors for all they’re worth — without having to spend any portion of their money on sure-losers in deep red states.
One might view this as an innocuous way of circumventing an arbitrary campaign finance rule: Who benefits from forcing parties to waste donor funds in uncompetitive races (other than operators of local news stations in, say, Helena, Montana)?
Still, the maneuver undermines the spirit of campaign-finance limits, which were put in place to restrict the influence of big-money donors — an ambition the Democratic Party officially endorses. To the extent that the DNC is using its donors’ money more effectively by laundering it through state parties, it is increasing the influence of those donors.
At present, there is no sign that Donald Trump’s fundraising committee has executed a similar scheme. Whether that speaks to his campaign’s greater integrity — or lesser cleverness — is for the reader to decide.