OCASIO-CORTEZ AND CHIEF OF STAFF MAY HAVE ILLEGALLY MOVED $885G IN CAMPAIGN CONTRIBUTIONS ‘OFF THE BOOKS’

Mar 5, 2019 by

3.5.19 – Fox News – Updated version

“Ocasio-Cortez, chief of staff illegally moved $885G in campaign contributions ‘off the books,’ FEC complaint alleges”

By Gregg Re | Fox News

Excerpts from this article:

New York RepAlexandria Ocasio-Cortez and Saikat Chakrabarti, the progressive firebrand’s multimillionaire chief of staff, apparently violated campaign finance law by funneling nearly $1 million in contributions from political action committees Chakrabarti established to private companies that he also controlled, according to an explosive complaint filed Monday with the Federal Election Commission (FEC) and obtained by Fox News.

Amid the allegations, a former FEC commissioner late Monday suggested in an interview with The Daily Caller News Foundation that Ocasio-Cortez and her team could separately be facing major fines and potentially even jail time if they were knowingly and willfully violating the law by hiding their control of the Justice Democrats political action committee (PAC). Such an arrangement could have allowed Ocasio-Cortez’s campaign to receive donations in excess of the normal limit, by pooling contributions to both the PAC and the campaign itself.

The FEC complaint asserts that Chakrabarti established two PACs, the Brand New Congress PAC and Justice Democrats PAC, and then systematically transferred more than $885,000 in contributions received by those PACs to the Brand New Campaign LLC and the Brand New Congress LLC — companies that, unlike PACs, are exempt from reporting all of their significant expenditures. The PACs claimed the payments were for “strategic consulting.”

Although large financial transfers from PACs to LLCs are not necessarily improper, the complaint argues that the goal of the “extensive” scheme was seemingly to illegally dodge detailed legal reporting requirements of the Federal Election Campaign Act of 1971, which are designed to track campaign expenditures.

…The complaint was drafted by the conservative, Virginia-based National Legal and Policy Center (NLPC). Ocasio-Cortez and Chakrabarti, according to the NLPC’s complaint, appeared to have “orchestrated an extensive off-the-books operation to make hundreds of thousands of dollars of expenditures in support of multiple candidates for federal office.”

The funds, the NLPC writes, were likely spent on campaign events for Ocasio-Cortez and other far-left Democratic candidates favored by Chakrabarti, who made his fortune in Silicon Valley and previously worked on Bernie Sanders’ 2016 presidential campaign. But no precise accounting for the expenses is available, and the complaint asks the FEC to conduct an investigation into the matter immediately.

“These are not minor or technical violations,” Tom Anderson, director of NLPC’s Government Integrity Project, said in a statement. “We are talking about real money here. In all my years of studying FEC reports, I’ve never seen a more ambitious operation to circumvent reporting requirements. Representative Ocasio-Cortez has been quite vocal in condemning so-called dark money, but her own campaign went to great lengths to avoid the sunlight of disclosure.”

Added Anderson: “They believe their cause is so great that they don’t have to play by the rules. They believe that they are above campaign finance law.”

Brand New Congress LLC does not appear to be registered as an LLC in any state, according to the complaint, but is a registered 527 tax-exempt organization. Fox News confirmed that Brand New Campaign LLC is a registered Delaware corporation, but Brand New Congress LLC is not.

…Other legal experts also sounded the alarm on Monday, saying Chakrabarti’s unusual arrangement raised serious unanswered questions.

Former FEC Associate General Counsel for Policy Adav Noti, who currently directs the Campaign Legal Center, told Fox News that it was a “total mystery” to him why Chakrabarti had established an LLC seemingly to take money from the PAC, rather than simply create a “normal venture,” like a consulting business, to provide services for candidates on the books.

“Certainly, it’s not permissible to use an LLC or any other kind of intermediary to conceal the recipient or purpose of a PAC’s spending,” Noti said. “The law requires the PAC to report who it disburses money to. You can’t try to evade that by routing it through an LLC or corporation or anyone else.”

Noti added: “What’s so weird about this situation is that the PAC that disbursed so much of its money to one entity that was so clearly affiliated with the PAC. Usually, that’s a sign that it’s what’s come to be known as a ‘scam PAC’ — one that’s operated for the financial benefit of its operators, rather than one designed to engage in political activity.”

…Added former FEC chairman Bradley A. Smith, in an interview with The Washington Examiner: “It’s a really weird situation. I see almost no way that you can do that without its being at least a reporting violation, quite likely a violation of the contribution limits. You might say from a campaign finance angle that the LLC was essentially operating as an unregistered committee.”

…”One possibility — a strong possibility, based on the description they put out, is they just got really bad legal advice that somehow said they had to do this,” Noti said. “But regardless, when they decided to use the PAC form, which they did, they subjected themselves to all the legal requirements that come with that.”

In terms of possible penalties, Noti said that Ocasio-Cortez’s campaign could be facing FEC fines if it followed bad legal advice and made reporting errors. But civil or even criminal fraud statutes, as opposed to campaign finance laws, would potentially kick in if it were determined that Chakrabarti had intentionally tried to hide the money to use for illicit expenses.

Meanwhile, former FEC commissioner Brad Smith told the Daily Caller News Foundation’s investigative unit that, because Ocasio-Cortez may have held legal control of the Justice Democrats PAC while the PAC was supporting her campaign, the two committees were likely acting as affiliated committees — and therefore share an individual contribution limit of $2,700 that might have been improperly and repeatedly exceeded.

The Daily Caller News Foundation’s review of archived copies of the Justice Democrats PAC’s website and relevant campaign documents indicated that Ocasio-Cortez and Chakrabarti “obtained majority control of Justice Democrats PAC in December 2017” — and yet allegedly failed to disclose afterward to the FEC the fact that the PAC was supporting her candidacy.

“If this were determined to be knowing and willful, they could be facing jail time,” Smith said. “Even if it’s not knowing and willful, it would be a clear civil violation of the act, which would require disgorgement of the contributions and civil penalties. I think they’ve got some real issues here.”

Added former Republican FEC commissioner Hans von Spakovsky: “If the facts as alleged are true, and a candidate had control over a PAC that was working to get that candidate elected, then that candidate is potentially in very big trouble and may have engaged in multiple violations of federal campaign finance law, including receiving excessive contributions.”

Monday’s FEC complaint comes on the heels of a separate complaint by the Washington, D.C.-based Coolidge Reagan Foundation, which alleged last week that the Brand New Congress PAC may have illegally funneled thousands of dollars to Ocasio-Cortez’s live-in boyfriend, Riley Roberts.

It was first reported late last month that the Brand New Congress PAC paid Roberts during the early days of the Ocasio-Cortez campaign. According to FEC records, the PAC made two payments to Roberts – one in August 2017 and one in September 2017 – both for $3,000.

The FEC complaint specifically cites the use of “intermediaries” to make the payments, “the vague and amorphous nature of the services Riley ostensibly provided,” the relatively small amount of money raised by the campaign at that stage and “the romantic relationship between Ocasio-Cortez and Riley” in asserting the transactions might violate campaign finance law.

The Coolidge Reagan Foundation — a 501(c)(3) — is requesting that the FEC look into the payments for potential violations on relevant campaign finance laws that state that campaign contributions “shall not be converted by any person to personal use” and that “an authorized committee must report the name and address of each person who has received any disbursement not disclosed.”

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