Lawnews reports a group called the Campaign Legal Center has filed a complaint with the Federal Elections Commission (FEC) claiming the Clinton campaign and the Democratic National Committee (DNC) violated the law by not accurately reporting their campaign expenditures. The complaint states that by not disclosing the purpose of large disbursements of money the campaign and DNC effectively hid the money under the bland category of “legal services” when in fact that money was going toward oppo-research. From the complaint:
During the 2016 election cycle, Hillary for America reported $5,631,421 in payments to Perkins Coie with the purpose described as “Legal Services.” The DNC reported paying Perkins Coie $6,466,711 for “Legal and Compliance Consulting.” However, the Post reported — and Perkins Coie itself largely confirmed — that Hillary for America and the DNC “shared the cost” of paying Fusion GPS through Perkins Coie to conduct opposition research on Donald Trump. Therefore, the purpose of at least some portion of the payments to Perkins Coie was not for legal services; instead, those payments were intended to fund opposition research.
This false reporting clearly failed the Commission’s requirements for disclosing the purpose of a disbursement. Describing payments as being for “legal services” or “legal and compliance consulting” when they are actually for opposition research is not “sufficiently specific to make the purpose of the disbursement clear,” and certainly would not allow “a
person not associated with the committee [to] easily discern why the disbursement was made when reading the name of the recipient and the purpose.”
The law requires campaigns to identify the recipient along with the ” date, amount, and purpose” of any expenditure over $200. We know the law firm received about $12 million from the DNC and the campaign but we still don’t know how much of that money went to Fusion GPS for their oppo-research. However, it’s probably safe to say that amount was well north of $200. The complaint goes on to argue that there is no excuse for the campaign/DNC failing to report this expenditure for a couple of specific reasons:
The Commission has not always required committees to report the identity of subcontractors whom itemized contractors hire, as long as the stated purpose of the payment to the
contractor reflected the “actual purpose” of the subsequent payment to the subcontractor, and the contractor receiving the disbursement has an “arms-length” relationship with the
committee making the disbursement. See Advisory Opinion 1983-25 (Mondale) at 3. That is not the case here. The stated purpose of the disbursements to Perkins Coie (“Legal Services”
or “Legal and Compliance Consulting”) did not reflect the “actual purpose” of how the disbursement was intended to be used in hiring Fusion GPS as a subcontractor. Additionally,
Hillary for America and the DNC did not have an arms-length relationship with Perkins Coie; the Chair of that firm’s political law practice, Marc Elias, was the Clinton campaign’s
general counsel, and according to the Washington Post was “acting on behalf of the Clinton campaign and the DNC” when he contracted with Fusion GPS for opposition research.
I assume the reason the Clinton campaign hired an oppo firm through their attorney was to create an attorney-client bottleneck that could isolate the campaign from any problems that arise downstream. But it’s not clear how it will insulate them from this complaint. LawNews sums it up this way:
It is legal under current campaign finance law for the Hillary Clinton campaign to commission an opposition research company to dig up dirt on Donald Trump. What is not legal, according to campaign legal experts, is for the campaign to pay a law firm who then hires other to perform campaign related activities without reporting the purpose of the expenditures.
If the FEC finds that there was a violation, the DNC and the Clinton campaign could face fines. The fines could be higher if the FEC finds that they intentionally mislead the public.
Maybe this explains why Hillary hasn’t come forward yet with a carefully worded statement responding to the Post story, i.e. she knew there were other shoes still to drop. She’s waiting until the story stabilizes before offering he usual less-than-truthful response.