Hillary Clinton Argues Against Campaign Finance Disclosure While Defending Against 2016 Violation

Case could have significant impact on money-in-politics law.
Photo by Bruce Glikas/Getty Images

Hillary Clinton‘s failed 2016 presidential campaign illegally failed to report millions of dollars in in-kind contributions from a political group it coordinated with, a lawsuit alleges.

Clinton’s campaign, Hillary for America, and a group run by longtime pro-Clinton operative David Brock, Correct the Record, are accused of coordinating between a super PAC and a campaign and not disclosing it in campaign finance records. Their defense involves a radical interpretation of campaign finance law that would effectively negate hard-fought restrictions pushed by Democrats to cut back on the influence of big money in politics.

The arguments pushed by the Clinton team are so contrary to Democrat rhetoric, and more in line with Republicans who think there should be few campaign finance restrictions, that the complaint against Clinton was brought by a left-leaning group and killed by Republican commissioners while Democrat commissioners, alongside FEC lawyers, sided with the complainants.

The allegations in the lawsuit dwarf those alleged against former President Donald Trump by a New York prosecutor, which similarly revolve around a payment that allegedly should have been reported to the Federal Election Commission (FEC)–in Trump’s case, for $130,000.

The Clinton lawsuit progressed through a step in the Court of Appeals for the Washington D.C. Circuit this week after a long, winding journey, with judges asking to hear more before ruling on a motion to dismiss.

During the presidential campaign, Brock openly boasted that Correct the Record was coordinating with the Clinton campaign, even though in most cases super-PACs are banned from coordinating with candidates.

In October 2016, a complaint was filed with the FEC by the Campaign Legal Center, a nonpartisan campaign finance watchdog group that is often associated with the Left. The initial FEC and DOJ complaint against Donald Trump and his lawyer Michael Cohen for failing to disclose hush money to porn star Stormy Daniels was also brought by a former CLC lawyer, Paul S. Ryan, who contended that the hush money was for political purposes. At the time, Ryan was working for the liberal group Common Cause, which said that “Transparency in political spending is something Americans deserve and have come to expect since the Watergate scandal and the law is clear that it is not optional for federal candidates.”

Campaign Legal Center maintained a consistent view in the Clinton case, telling a federal appeals court that Brock’s coordinated pro-Clinton activities extended to rampant and wide-ranging help including “paying staff to produce and circulate memos to reporters ‘detailing Republicans’ stance on prescription drugs’ on the same day that Clinton announced her health care policy” and “paying staff to run a ‘30-person war room’ to defend Clinton during hearings before the House Select Committee on Benghazi.” Apparent coordination allowed for a good-cop, bad-cop dance, with Clinton’s campaign stating that she would not smear primary rivals, while Brock’s group did it for her.

Brock’s organization contended that it was allowed to coordinate by citing an exemption for unpaid, internet communications, as opposed to buying TV ads. But the FEC’s top lawyer found that “[Correct the Record] raised and spent approximately $9 million on a wide array of activities, most of which are not fairly characterized as ‘communications.’”

“The bulk of [Correct the Record]’s reported disbursements are for purposes that are not communication-specific,'” FEC staff wrote. And they were decidedly paid expenditures, staff wrote, recommending that the FEC take enforcement action. “The fact that [activities] were subsequently transmitted over the internet does not retroactively render the costs of [those activities] a ‘communication’ cost,” the agency’s general counsel concluded.

Democrat appointees to the FEC agreed. But ironically, Republican appointees blocked it. Republicans are often critical of campaign finance regulations, and they seemingly wanted to set a standard that would apply to both sides.

In August 2019, Campaign Legal Center filed a lawsuit in federal court in D.C. against the FEC for allegedly failing to enforce campaign finance law and causing voters to be deprived of information about the true state of the Clinton campaign’s finances. In still more twists, the FEC declined to defend its position in court, and the Hillary Clinton campaign and Correct the Record asked to intervene in the case and argue the defense themselves, even though they weren’t parties to it.

The D.C. judge noted that the case is extremely important because the defense rested on the idea that campaigns could coordinate with super PACs as long as the work eventually reached the internet–which would include virtually anything.

“Any expenditure could be exempted from regulation if it ultimately resulted in an unpaid internet communication,” the judge said, writing that it “creates a loophole that effectively vitiates the plain language of FECA.”

This interpretation was invalid “because it ignored clear evidence of coordinated expenditures between [the Clinton campaign] and [Correct the Record] even apart from those claimed to be exempt under the internet-communications regulation.”

Then the court dismissed the lawsuit anyway on technical grounds, saying the Campaign Legal Center didn’t have standing to sue.

The Campaign Legal Center appealed to the federal Court of Appeals for D.C., which found that CLC does have standing. It said that because of the lack of disclosure, the public doesn’t know the financial extent to which Clinton coordinated with an outside entity, and “we find that Appellants have established a cognizable informational injury.”

This week, the Court of Appeals responded to a motion to dismiss by the Democrat groups by referring it to a “merits panel” to be further argued.

Brock did not respond to a request for comment through his new group, Facts First USA.

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