Alexandria Ocasio Cortez and the FEC complaint, is she in trouble?

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Alexandria Ocasio Cortez and the FEC complaint, is she in trouble?

-By Heather McDonald

Alexandria Ocasio Cortez popularly known as AOC was only 28 years old when On November 6, 2018, she galvanized the left wing and stunned the Democratic establishment by defeating the ten-term incumbent Joe Crowley in the House of Representatives’ elections; making her the youngest members of the 116th United States Congress and the youngest congresswoman in United States history.

AOC is a member of the Democratic Socialists of America and is pushing for progressive platforms that will include guaranteed federal jobs, Medicare for all, free public college and trade school and 70% marginal tax rate for incomes above $10 million and the green new deal within 10 years.

Critics have termed the green new deal and the efforts to attain 100% renewable energy as unrealistic, too expensive and impossible to achieve or sustain. This undermines the credibility of the entire endeavor and stands zero chance of passing both houses in its current form.

In addition to this, a recent FEC complaint by The conservative National Legal and Policy Center is accusing AOC and her campaign specifically her campaign manager of significantly violating campaign finance laws, So is she in trouble?

Her Campaign Pledge on Dark Money in Politics

AOC has built quite a reputation by advocating for clean campaign finances, expanding opportunities and reducing inequality among a racially diverse New York population.

One of her first campaign pledges was her commitment to clean campaign finance. AOC stated that she was aware that campaign finance reforms would not happen overnight but that the only way for real reform was by regulating the way elections are funded.

She has been a very vocal critic of ‘’dark money’’ in politics for instance, in cases where representatives finance their campaigns with donations from corporate PACs in industries such as pharmaceuticals or fossil fuels and yet are expected to legislate impartially.

She cited the Citizen’s United ruling as deeply harmful as it favors the wealthy by encouraging the notion that money is speech and corporates are people. It discourages less privileged people to run for office.

She has also been supportive of ideas such as the overturning through a constitutional amendment of the Supreme Court decision on Citizens United v. Federal Election Commission and other unwanted rulings such as in Buckley vs. Valeo case.

  

Allegations of Campaign Finance Violations

Although AOC has maintained a vocal criticism of untraceable finances in politics, she has recently come under fire from conservative groups for not being transparent in her 2018 campaign.

The conservative’s National legal and policy center (NLPC) requested for an investigation on AOC’s campaign arguing that her allies have some questions to answer regarding how some of their campaign finances were spent.

AOCs chief of staff Saikat Chakrabarti founded two groups (PACs) namely “Justice Democrats” and “Brand New Congress LLC” with the goal of helping elect progressive candidates to office. In a business filling, AOC is listed as Governor of Justice Democrats.

PACs are political action committees formed for the sole purpose of fundraising and using the money to elect or defeat candidates. Most PACs represent businesses or ideological interests while Limited liability companies have been used in politics to obscure the flow of campaign money.

AOC campaign is being accused of forming the PACs to route money to Mr. Chakrabati’s LLCs for other non-political uses disguised as “strategic consulting” payments.

In 2016 and 2017, this political action committees operated by the groups paid over 1 million dollars to a Limited Liability company that was run by Mr. Chakrabarti.

Normally campaign expenses are reported to the FEC but by diverting the money to LLC, AOC and her allies were able to fulfill FEC’s disclosure requirements by labeling the expenses as “strategic consulting” They were, therefore, able to spend the money however they wanted without divulging details about their expenditure.

Her Team’s Response

According to lawyer David Mitrani who represents AOC and other groups named in the FEC complaint, Chakrabarti formed the PACs, not to obscure spending but to satisfy or guard themselves against vague tax and campaign laws.

Mitrani also stated that the PACs were meant to be a central organization or one-stop vendor to foresee campaign activities such as communications, field, online organizing, and fundraising. The LLC was meant to handle the campaign side of things while the PACs would procure for campaign-related services.

Mr. Mitrani denied the accusations on behalf of the group and added that all the groups were aware of all the legal requirements pertaining to campaign finances and had fully satisfied all the FEC’s requirements.

The groups added that Chakrabarti was not even on their payroll and lived off income from his other side businesses unrelated to the campaign.

The Current situation at FEC

The FEC was established in 1975 and is the independent regulatory agency charged with administering federal campaign finance law. It has jurisdiction over the financing of campaigns for the US House, Senate and both the vice presidency and the presidency.

The commission ensures that there is full disclosure of finances in campaigns, enforces campaign finance laws such as those to do with limits, prohibitions on contributions and the public funding of Presidential elections.

Its six commissioners are appointed by the president and approved by the Senate, but not more than three can come from the same party. Currently, only four are in office after the resignation of Lee Goodman a Republican appointee.  They include Mathew Petersen, Steve Walther, Caroline Hunter, and Ellen Weintraub.

Campaign financing has long been an obstacle in the panel’s cohesion with deep divisions apparent among the commissioners. At least four agreeing votes are required for policy making by the FEC.

AOC remains safe from indictment if the FEC commissioners have no quorum for they will play a critical role in how this will play out.

The resignation of the Republican-appointed Lee Goodman left the commission deeply divided and his departure means there are now two vacant seats which is not helping the situation.

They now have a bare quorum to conduct business. Goodman had pushed for less regulation of money in politics during the four years he has served on the panel while Democrat commissioner Ellen Weintraub does not share that notion.

Another commissioner is the outgoing chairperson, Stephen T. Walther who is an independent and is considering stepping down as well. Stephen T. Walther has traditionally voted with the Democrats.

In anticipation of the two departures from the panel, the White house nominated Trey Trainor a conservative Texas lawyer but is yet to be confirmed by the administration’s committee.

Concerns about campaign finances

Campaign finance reformers are of the opinion that there is a lack of transparency in how political money is raised and spent. The big financial contributors are influencing elected representatives.

The current disclosure level is $200; however, 63% of the money going to the House of Representatives comes from people who give much more than $200.

They argue that there should be tighter regulations to manage “dark money” and that high-level donors should be identified. The use of LLC is common but the reformers argue that there is cause for concern.

LLCs are structured in a way that they can be used to obscure personal payments of money that donors intended for political uses only.

Conclusion

Fraudulent PACs make huge payments to their staff without doing much campaign work. According to Bradley Smith, a Republican former chairman of the Federal Election Commission, the most notable issue on the AOC campaign was that the PACs and the LLC weren’t transparent in how they spent their campaign money.

The complaint pointed out that AOCs campaign made large payments to the LLCs for strategic consulting but did not specify the true nature of the payments or what they really entail.

Mr. Smith is also argued that there is a likely hood that AOC’s campaign cheaply procured services from this LLC or at below market rates and then got reimbursements for the PACs; which would be an independent expenditure by the campaign that transcends legal limits and could spell trouble for AOC.

What are the Implications?

Whether or not AOC is in trouble after the FEC complaint depends entirely on the FEC. They have to make a decision on whether there is a reason to pursue a formal investigation into the matter.

AOC currently serves on two committees namely the House committee on oversight and reform, and the House financial services committee. According to Congressional Research Service, the speaker can remove members of select committees and conference committees at any given time if it deems necessary; in this case, if she is found culpable.

In case of an indictment, internal party rules also require any indicted member to step aside pending investigations which could at worst lead to the possibility of losing her congressional seat. However, it’s up to the FEC to establish whether this claim carries sufficient evidence to meet the legal standards for an inquiry.

The worst-case scenario for AOC in case the claims that her campaign willfully violated campaign finance law are substantiated, then she could be facing heavy fines or worse,  jail time.

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