Mar-a-Lago, $20K worth of flowers and lots of consulting: When joint fundraising money goes beyond campaigns

“The law doesn’t say you have to spend money wisely.”

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SOURCECenter for Responsive Politics

Joint fundraising committees are growing increasingly common as candidates and parties seek out big checks from wealthy donors. But while millions of dollars might flow into these committees on a single night, some of them fail to pass along much of this money to the campaigns for which they are supposedly fundraising.

According to Federal Election Commission guidelines, joint committees are supposed to pass the net proceeds of any fundraising event to their affiliated committees within 10 days. Of the 204 joint committees that raised at least $10,000 during the first half of 2019, three quarters allocated at least 80 percent of their disbursements to their affiliated campaigns.

But the ability of most joint committees to successfully transfer funds to their affiliates raises questions as to why some don’t do the same.

And an OpenSecrets analysis of FEC filings found more than a dozen examples of joint fundraising committees diverting a substantial portion of their money away from campaigns. Some spent lavishly for administrative purposes. Others paid large sums to political consultants with whom they were closely connected.

Such disbursements are not illegal. Campaign finance laws only bar spending campaign funds for personal use. But as joint fundraising committees have grown rapidly since the McCutcheon v. FECdecision in 2014 removed the cap on the total amount of money an individual can contribute in a given election cycle, they raise questions about who stands to benefit from massive campaign contributions.

Consulting, consulting, consulting

A few joint fundraising committees did not distribute any money to their affiliated committees during the first half of 2019, including Team Mitt, which is supposed to benefit Sen. Mitt Romney’s (R-Utah) campaign, his leadership PAC and the National Republican Senatorial Committee.

Team Mitt took $293,838 in contributions and spent $186,098, most of which went to consulting, including $76,000 to Mark Strategies LLC, nearly $46,000 to SCM Associates and $22,500 to Buckminster Strategies.

All campaigns and joint fundraising committees must spend money to raise money, whether that means renting a nice hotel for a fundraiser or hosting a website to attract donors online. Hiring political consultants can be part of the fundraising process.

Of the 25 top-raising joint committees, 19 had disbursements described as consulting in FEC reports during the first half of 2019. But for 18 of those 19 committees, spending on consulting amounted to less than 15 percent of the committee’s total expenditures.

Sen. Ted Cruz’s (R-Texas) joint fundraising committee had plenty to spend this year after Cruz staved off a challenge from Beto O’Rourke during the 2018 midterms. The Ted Cruz Victory Committeedisbursed $540,700 during the first two quarters of 2019, but only 45 percent of that total went to Cruz’s Senate campaign and his leadership PAC, the two affiliated committees.

More than a quarter of the Victory Committee’s expenditures, $156,721, went to Lofstrom Consulting, a Republican consulting firm headed by Lauren Loftstrom, who was Cruz’s national finance director during his presidential campaign.

A source close to the Cruz campaign said that consulting fees were a routine for any joint committee and served as a way for the committee to cover the costs of contacting donors and carrying out other fundraising activities.

Cruz’s committee is far from the only one to pay large sums to a current or former staffer. Rep. Garret Graves (R-La.) raised $134,729 during the first half of 2019 through his joint fundraising committee, the Garret Graves Victory Fund, which benefits his leadership PAC and his congressional campaign.

Most of that money — more than $80,000 — however, was paid to Nancy Peele for fundraising consulting, according to FEC filings. Peele was Graves’ assistant chief of staff until April 2019.

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Like campaign committees, joint fundraising committees are not allowed to spend fundraising money for personal use, said Daniel Weiner, senior counsel with the Democracy Program at the nonpartisan Brennan Center for Justice who previously worked as counsel at the FEC. But paying political consultants is perfectly legal, even if it doesn’t seem like a choice that would help a candidate in the polls.

“If a candidate decides they’re going to pay their fundraising consultant 70 percent of the money raised, the law doesn’t speak to that,” Weiner said.

Over the last few years, most joint fundraising committees — both those that spend significantly on consulting and those that don’t — have been led by Republicans.

During the 2016 election cycle, however, Hillary Clinton’s campaign came under fire for issues relating to the Hillary Victory Fund, a joint fundraising committee with the Democratic National Committeeand a number of state parties.

The biggest joint fundraising committee of the election cycle, Hillary Victory Fund ran ads similar to those of Clinton’s presidential campaign, leading to questions as to whether the committee was campaigning on the former secretary of state’s behalf in addition to fundraising. During the primaries, the fund sponsored Clinton’s official store, the Washington Post found, and reimbursed the Clinton campaign for salaries and overhead.

The fund also allegedly redirected money from state parties to the DNC, which would have allowed the DNC to raise more money that contribution limits would have otherwise permitted. A pro-Trump super PAC filed a complaint with the FEC alleging that the group’s activities had violated campaign finance laws, but it was dismissed.

The FEC also initiated its own complaint against the Texas Democratic Party, saying the party failed to adequately report joint fundraising receipts from the Hillary Victory Fund and subsequent transfers to the DNC. The complaint was resolved in early August, and the Texas Democratic Party agreed to pay a $17,000 fine.

The Hillary Victory Fund ultimately gave about 71 percent of its disbursements to its affiliated committees.

About those fundraisers

In addition to paying political consultants, FEC filings show some joint fundraising committees’ luxurious spending for fundraising or administrative purposes. Trump Victory, one of President Donald Trump’s joint fundraising committees, passed 75 percent of its expenditures, about $18 million, to Trump’s presidential campaign and the RNC during the first half of 2019. But it also spent a total of $345,000 at Mar-a-Lago, the Trump-owned resort in Palm Beach, Fla., on three separate occasions during that period.

Other venues used by joint fundraising committees include the Sun Valley resort in central Idaho, where Sen. Mike Crapo’s (R-Idaho) Crapo Victory Committee spent $22,330 on site rental, catering and lodging. All For Our Country Victory Fund, affiliated with Sen. Jeanne Shaheen (D-N.H.), spent $27,061 at Wynn Resorts in Las Vegas.

Trump Victory also spent $19,988 on “floral expenses” at a flower shop in Houston, Texas. The McCarthy Victory Fund, affiliated with House Minority Leader Kevin McCarthy (R-Calif.), spent $764 at a Cuban cigar company.

Committees that spend a lot on consulting, event planning or administrative work don’t seem to get a higher payout because of it. During the first half of 2019, the top five joint committees in terms of fundraising all kept operating expenses to less than 30 percent of their total spending.

In coming election cycles, fundraising through joint committees will likely continue to grow. Campaigns raised $525 million through these groups in 2018, a record for a non-presidential year. And joint fundraising committees, like campaigns, are allowed to spend their money however candidates and their advisers see fit.

“The law doesn’t say you have to spend money wisely,” Weiner said.

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