Hal Ginsberg walks us through the covert deal that tilted the Democratic National Committee in Hillary Clinton's favor. As you might expect, Donna Brazile's insider book shows that it was all about the money.

/By Hal Ginsberg/ A couple of weeks ago, Politico published an excerpt of Donna Brazile’s new book, Hacks. In it, Brazile concludes that the DNC acted as an arm of the eventual Democratic nominee Hillary Clinton’s campaign in the 2016 Democratic primaries. This unfairly handicapped Clinton’s chief challenger Bernie Sanders and may have led to Trump’s election.        

          For Brazile, President Obama deserves a large portion of the blame due to his penchant as DNC leader for overspending. Brazile is especially peeved that, at Obama’s instigation, the DNC maintained high-priced consultants on its payroll after the 2008 and 2012 elections. Brazile also chastises former Chair Debbie Wasserman Schultz for poor fundraising over the same period. 

            According to Brazile, this mismanagement left the DNC in a $24 million hole by mid-2015. In order to settle this debt, the DNC entered into a Joint Fundraising Agreement with Clinton pursuant to which her campaign would pay off the debt. In return, however, the DNC made concessions that conferred on Clinton an unfair advantage throughout the primaries.

The Memorandum

         Brazile became convinced of the DNC’s partiality during the primaries after she discovered a Memorandum dated August 26, 2015. This Memorandum fleshed out the terms of a previously agreed-upon Joint Fundraising Agreement (JFA) between the DNC and the Clinton campaign denominated Hillary for America (HFA). The dispensations afforded Clinton in the Memorandum include: 1) The DNC’s “choice” for its new Communications Director would be one of two candidates previously identified as acceptable to HFA.  2) Future DNC senior staff decisions would be made among candidates deemed acceptable to HFA. 3) HFA would have the opportunity to review nearly all DNC communications featuring Democratic primary candidates. 4) The DNC would urge state parties to participate in the Hillary Victory Fund (HVF).

            In the wake of Brazile’s Politico article, pressure began to build within and outside the DNC for reforms to ensure more transparent and even-handed primaries in the future. A couple of days after the Politico piece dropped, however, the Washington Post disclosed Brazile’s far-fetched musings about replacing the Clinton-Kaine ticket with one more to her liking. Unfortunately, this has given defenders of Clinton and the DNC an opportunity to attack Brazile’s credibility. Nevertheless, Clinton’s influence over the DNC did corrupt the Democratic primaries as Brazile contends.

The Hillary Victory Fund

            The provisions giving HFA power over staffing decisions and the right to review nearly all DNC communications mentioning any of the primary candidates are obviously problematic and likely impacted negatively on Bernie’s chances to win the primaries. But the fund-raising provisions were likely the most critical. Campaign finance rules limited the size of individual contributions to one campaign in a cycle to $2,700. On its face, this must have appeared to be a significant handicap to Clinton in her nascent primary fight against Bernie Sanders.

            Clinton relied heavily on contributions from the relatively small number of multi-millionaires and billionaires who profited from her third way approach. For HFA’s wealthy financiers, $2,700 was a fraction of what they were prepared to spend to prevent the Democrats from nominating a candidate who defiantly called on them to pay higher taxes. Since Sanders, by contrast, raised small amounts from millions of donors, the $2,700 limit posed no difficulties for him. 

            HFA’s way around this difficulty was to urge large donors to write big checks to the HVF - a committee consisting of the DNC, HFA, and the 32 Democratic state Democratic parties who joined it. Denominated a joint fundraising committee, the HVF could seek contributions from individuals amounting to over $350,000. The calculation was $33,400 for the DNC plus $10,000 for each participating state party. Simply put, the more state parties who participated, the more HVF could raise from individual donors. This explains the provision in the Memorandum that the DNC agreed to urge state committees to participate in the HVF.

The Impact

            Excepting the blatant advantage the JFA provided Clinton, the dominance of HFA over the DNC throughout the primaries can be gleaned but perhaps not proven. Scheduling few debates obviously favored the front runner. At a critical point during the run-up to the Iowa caucuses, the DNC denied Bernie access to an important database of Hawkeye voters. Emails posted at Wikileaks reveal various DNC staffers spitballing ways to plant smears of Bernie Sanders in the media.

            Whatever the cumulative effect of these peccadilloes, it pales in comparison to the benefit Clinton derived from the millions of HVF dollars that the DNC laundered and returned to HFA. As documented last year by Politico on May 2:

less than 1 percent of the $61 million raised by [HVF] stayed in the state parties’ coffers. . . By contrast, the victory fund transferred $15.4 million to Clinton’s campaign and $5.7 million to the DNC. . .

 And most of the $23.3 million spent directly by the victory fund has 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[.] . . 

 [T]he arrangement has prompted concerns among some participating state party officials and their allies. They grumble privately that Clinton is merely using them to subsidize her own operation, while her allies overstate her support for their parties and knock Sanders for not doing enough to help the party. (Emphasis supplied.)

           Upon learning of the arrangement, Nebraska Democratic Party Chair Jane Kleeb told the Washington Post, “Nebraska never even signed the JFA because we . . . didn’t want to be a funnel for, essentially, money-laundering.” To some party members, the Joint Fundraising Agreement decided the primaries for Clinton. Per Kleeb, “a small group of establishment Democrats got to determine who our nominee was. That goes against everything that Democratic values are built on.”

            Kleeb may be going too far. What seems clear is that Clinton derived a significant material advantage from the JFA and the privileges afforded HFA in the Memorandum. Whether Bernie would have won the primaries in their absence, however, is an open question. Clinton’s very significant advantages among voters of color and in closed primary states may have been more decisive than her ability to skirt campaign finance rules.

Push Back

            Those defending the DNC and the Clinton campaign against Brazile’s allegations of institutional unfairness include MSNBC weekend host Joy Ann Reid, podcaster Keith Olbermann, and online commentator Wonkette. The latter two point to a construction clause in the Memorandum:

Nothing in this agreement shall be construed to violate the DNC's obligation of impartiality and neutrality through the Nominating process. All activities performed under this agreement will be focused exclusively on preparations for the General Election and not the Democratic Primary. Further we understand you may enter into similar agreements with other candidates.

            The problem with reliance on this boilerplate is the operative clauses in the Memorandum directly contradict it. Clinton did get to decide the finalists for the position of Communications Director and the position was filled in September 2015 long before the Iowa caucuses. Clinton’s right to review all DNC communications mentioning primary opponents is also incompatible with the anodyne construction clause. Most importantly, Clinton accessed and spent nearly all the funds raised by HVF throughout the primary season in violation of the spirit, if not letter, of federal campaign finance laws.

            Reid contends that Bernie wasn’t hurt by the JFA since his fundraising operation was as productive as hers. This argument ignores the fact that Sanders should have had a big advantage in the primaries because he had so many more individual donors than any other candidate. He did not because the JFA allowed Clinton to sidestep limits on contributions designed to mute the impact of any one contributor or small number of contributors.

            A related argument is that Sanders entered into a similar JFA and therefore enjoyed the same benefits from it that Clinton did. But as Bernie’s campaign manager Jeff Weaver pointed out, the Sanders campaign didn’t rely on  high-dollar donors and didn’t solicit contributions in excess of the legal limit from its wealthier supporters.

            It should come as no surprise that many of Brazile’s harshest critics are or were cable news pundits. A fundamental aspect of the DNC corruption was the substantial debts it incurred because it did not jettison after elections its slew of political consultants drawing large salaries. Such consultants make the massive political ad buys that generate huge profits for MSNBC, CNN, and Fox News and pay their talent. Staying on the good side of cable news rainmakers is only smart strategy for political talk show hosts - especially ones who are deemed replaceable like Joy Reid or underemployed like Keith Olbermann.

Conclusion

            The push back against Brazile and the resistance to her calls both for transparency and an end to joint fundraising agreement abuses at the DNC prove her broader claim of a “cancer” within the party. Democratic Party insiders and media elites obviously are benefiting handsomely from a system in which the rich and powerful call the shots while poor, working, and middle-class Democrats are stuck pressing their faces against the window. If this corruption led to unprecedented electoral success, perhaps it could be justified under an ends justifies the means rubric. The Barack Obama, Wasserman Schultz, Hillary Clinton years, however, proved to be nothing short of disastrous for the Party ending with Trump’s election and Republicans in complete control of the federal government and over 30 states. It’s long past time to reform the DNC regardless of the establishment’s outraged squeals.

Hal Ginsberg is a regular contributor to the PM BlogSpace; he is a Montgomery County activist and blogs as well at halginsberg.com