March 5, 2019

USA: Two Political Action Committees Founded By Rep. Ocasio-Cortez’s Top Aide Funneled Over $1 Million In Political Donations Into Two Of His Own Private Companies. Both Could Be Facing Jail Time.

The Washington Examiner
written by Alana Goodman
Monday March 4, 2019

Two political action committees founded by Rep. Alexandria Ocasio-Cortez’s top aide funneled over $1 million in political donations into two of his own private companies, according to a complaint filed with the Federal Election Commission on Monday.

The cash transfers from the PACs — overseen by Saikat Chakrabarti, the freshman socialist Democrat's chief of staff — run counter to her pledges to increase transparency and reduce the influence of "dark money" in politics.

Chakrabarti's companies appear to have been set up for the sole purpose of obscuring how the political donations were used.

The arrangement skirted reporting requirements and may have violated the $5,000 limit on contributions from federal PACs to candidates, according to the complaint filed by the National Legal and Policy Center, a government watchdog group.

Campaign finance attorneys described the arrangement as “really weird” and an indication "there’s something amiss." They said there was no way of telling where the political donations went — meaning they could have been pocketed or used by the company to pay for off-the-books campaign operations.

PACs are required to disclose how and when funds are spent, including for expenditures such as advertisements, fundraising emails, donations to candidates, and payments for events and to vendors.

The private companies to which Chakrabarti transferred the money from the PACs are not subject to these requirements.

The complaint names Ocasio-Cortez and Chakrabarti as respondents. It asks the FEC to investigate and audit the two PACs, saying they were engaged in an "an elaborate scheme to avoid proper disclosure of campaign expenditures."

Tom Anderson, director of the National Legal and Policy Center's Government Integrity Project, said: "It appears Alexandria Ocasio-Cortez and her associates ran an off-the-books operation to the tune of hundreds of thousands of dollars, thus violating the foundation of all campaign finance laws: transparency."

Chakrabarti, 33, is a Harvard graduate and technology entrepreneur who became an organizer for Bernie Sanders during the socialist's 2016 presidential campaign.

He founded a PAC called Brand New Congress in 2016 and another called Justice Democrats in 2017, with the stated goal of helping elect progressive candidates to Congress. One of those candidates was Ocasio-Cortez, who, last November, age 29, became the youngest woman ever elected to Congress.

According to the Brand New Congress website, the PAC would build a "unified campaign" infrastructure including fundraising, organizing, rallies, and advertising progressive congressional candidates across the country could "plug into," saving the individual campaigns time and money.

"Our idea is really to run a single unified presidential-style campaign that is going to look a lot like the Bernie Sanders campaign,” said Chakrabarti in an interview with MSNBC's Rachel Maddow in May 2016. "The campaign infrastructure and fundraising is set aside from the campaigning."

In 2016 and 2017, Chakrabarti’s PACs raised about $3.3 million for the project, primarily from small donors. During this time, the committees transferred over $1 million to two shell companies controlled by Chakrabarti with names similar to one of the PACs, Brand New Campaign LLC and Brand New Congress LLC, according to federal election filings.

A few weeks after starting the Brand New Congress PAC, Chakrabarti formed one of the companies, Brand New Campaign LLC, in Delaware, using a registered agent service and mailbox-only address.

Over the next seven months, as small-dollar political donations poured into the PAC from progressives across the country, the committee transferred over $200,000, 82 percent of the contributions, to the company Brand New Campaign LLC. The payments were for "strategic consulting," according to federal election filings. They were sent to an apartment address listed for Chakrabarti in the Greenwich Village area of Manhattan.

In 2017, Brand New Congress PAC transferred another $240,000 to Brand New Congress LLC, also for "strategic consulting." Another PAC co-founded by Chakrabarti that year, Justice Democrats, transferred an additional $605,000 to Brand New Congress LLC in 2017.

Brand New Congress LLC does not appear to be registered in any state, according to state government records available online. It is unclear where or when it was incorporated.

Adav Noti, the senior director of the Campaign Legal Center and a former FEC lawyer, said the arrangement was highly unusual and seemed intended to obscure the destination of the funds.

"None of that makes any sense," said Noti. "I can't even begin to disentangle that. They're either confused or they're trying to conceal something."

Noti said it would be simpler to set up a consulting company and work directly with campaigns to provide services for a fee rather than creating a federal PAC and sending the money to a company controlled by the same person.

"It does seem like there's something amiss. I can only think of really two likely possibilities for this sort of pattern of disbursements," said Noti. "One is the scam PAC possibility — they're really just paying themselves and they’re concealing it by using the LLC. The other is that there’s actually another recipient, that the money is going to the LLC and then being disbursed in some other way that they want to conceal."

Bradley A. Smith, a former chairman of the FEC, said he has never seen such an arrangement. "It's a really weird situation," he said. "I see almost no way that you can do that without it 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."

Chakrabarti declined to comment on the FEC complaint or provide details about his companies’ financial activities. Corbin Trent, a spokesman for Ocasio-Cortez, declined to comment.

Zeynab Day, communications director for the Brand New Congress PAC, said Chakrabarti was not currently affiliated with the group and that it recently went through a "transition period." She referred questions about the LLC to Chakrabarti. “I’m unable to answer any questions about the LLC … I am not informed about them. We are not an affiliated group,” she said.

A spokesperson for Justice Democrats said he did not know why the PAC paid so much money to Chakrabarti’s LLCs. When asked what the Justice Democrats PAC does on a daily basis, he said, “It’s very clear what we do,” but declined to elaborate.

Chakrabarti founded Brand New Congress PAC, in April 2016. According to a statement released by Justice Democrats PAC last May, Chakrabarti "was the only controlling member" of the company Brand New Congress LLC and "took no salary." The statement added: "Saikat is lucky to have a small side business that generates him enough income that he is able to do all of this work as a volunteer."
The Daily Caller
written by Andrew Kerr
Monday March 4, 2019
  • Rep. Alexandria Ocasio-Cortez and a top aide appear to control an outside PAC credited with being the central force behind her June 2018 primary victory.
  • One former Federal Election Commission member thinks there would be a “serious investigation” if a complaint were filed, noting that the probe could potentially result in civil penalties or even jail time for Ocasio-Cortez and her chief of staff.
  • A second former commissioner said there were possibly “multiple violations of federal campaign finance law.”
  • Justice Democrats ran campaigns for Ocasio-Cortez and 11 other Democrats, but the New York Democrat was the only one to win her general election.
Democratic Rep. Alexandria Ocasio-Cortez and her chief of staff Saikat Chakrabarti obtained majority control of Justice Democrats PAC in December 2017, according to archived copies of the group’s website, and the two appear to retain their control of the group, according to corporate filings obtained by The Daily Caller News Foundation. If the Federal Election Commission (FEC) finds that the New York Democrat’s campaign operated in affiliation with the PAC, which had raised more than $1.8 million before her June 2018 primary, it would open them up to “massive reporting violations, probably at least some illegal contribution violations exceeding the lawful limits,” former FEC commissioner Brad Smith said.

Ocasio-Cortez never disclosed to the FEC that she and Chakrabarti, who served as her campaign chair, controlled the PAC while it was simultaneously supporting her primary campaign, and former FEC commissioners say the arrangement could lead to multiple campaign finance violations. The group backed 12 Democrats during the 2018 midterms, but Ocasio-Cortez was the only one of those to win her general election.

“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,” former Republican FEC commissioner Hans von Spakovsky told The Daily Caller News Foundation.

And fellow former FEC commissioner Brad Smith told The DCNF that if “a complaint were filed, I would think it would trigger a serious investigation.” He also noted that such a probe could potentially result in jail time for Ocasio-Cortez and her chief of staff, Chakrabarti.

Republican election attorney Charlie Spies told TheDCNF: “It looks like the campaign and PAC are under common control and the PAC was funding campaign staff and activities as an alter-ego of the campaign committee, which would be a blatant abuse of the PAC rules.”

Ocasio-Cortez and Chakrabarti could face prison if the FEC determines that they knowingly and willfully withheld their ties between the campaign and the political action committee from the FEC to bypass campaign contribution limits, according to Smith.

“At minimum, there’s a lot of smoke there, and if there are really only three board members and she and [Chakrabarti] are two of them, sure looks like you can see the blaze,” Smith, a Republican, told TheDCNF. “I don’t really see any way out of it.”

Justice Democrats stated on its website from December 2017 until two weeks after Ocasio-Cortez’s June 2018 primary victory that she and Chakrabarti held “legal control” of the PAC, and corporate filings obtained by TheDCNF show that the two still serve on the three-member board of Justice Democrats on paper.

Political committees are affiliated if they are “established, financed, maintained or controlled by … the same person or group of persons,” federal election law states.

Smith said: “The admission makes it open and shut if someone wants to file a complaint with the FEC. I don’t see how the FEC could not investigate that. We’ve even got their own statement on their website that they control the organization. I don’t see how you could avoid an investigation on that.”

And if the FEC concludes that Ocasio-Cortez’s campaign and Justice Democrats were operating as affiliated committees, “then anyone who contributed over $2,700 total to her campaign and the PAC would have made an excessive contribution,” which is a campaign finance violation, Smith told TheDCNF.

Ocasio-Cortez’s campaign and Justice Democrats raised a combined $4.6 million during the 2018 midterm election cycle, FEC records show. There’s a maximum five-year prison sentence for anyone who knowingly and willfully receives a collective $25,000 or more in excessive campaign contributions in a single calendar year.

Justice Democrats raked in far more than $25,000 from individual contributors of over $2,700 after Ocasio-Cortez and Chakrabarti took control, according to FEC records.

“If this were determined to be knowing and willful, they could be facing jail time,” Smith told TheDCNF. “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.”

Spies, who served as legal counsel for Mitt Romney’s 2008 presidential campaign, said: “There are a bunch of well-funded groups on the left that file complaints on much thinner grounds than this against conservatives and Republican candidates. I hope that these so-called non-partisan groups file complaints and treat this with the same urgency that they would if it were a conservative candidate.”

Ocasio-Cortez credits Justice Democrats for recruiting her to run for Congress in May 2017. She tweeted that the group got her campaign up and running by helping “with all that stuff a normal person would need (what forms to fill out? etc).”

Ocasio-Cortez paid a combined $27,293 to Justice Democrats and to what was effectively its predecessor, Brand New Congress LLC, for administrative, staffing and overhead services from the time she declared her candidacy to her shock primary victory, according to FEC records. Ocasio-Cortez only began paying her staffers directly through her campaign beginning in March 2018, according to her campaign reports.

Justice Democrats supported Ocasio-Cortez throughout her entire primary run. The group, which Ocasio-Cortez and Chakrabarti appear to have legally controlled for much of her campaign, had raised more than $1.8 million by the time she ousted incumbent Democrat Joe Crowley.

Ocasio-Cortez was the only Justice Democrats-sponsored candidate to win her general election. She was also the only Justice Democrats-sponsored candidate to hold legal control of the PAC.

The other 11 candidates propped up by Justice Democrats lost their respective races, according to The New York Times.

Justice Democrats staffers said there were discussions to go all in for Ocasio-Cortez as early as June 2017.
Justice Democrats’ goal was for one of its sponsored candidates to defeat the incumbent, co-founder Corbin Trent told The Washington Post in June 2018, and former Justice Democrats staffer Max Berger tweeted that they established that goal in 2017.

But the PAC was advertising that it sought to replace numerous Democratic members of Congress with progressives.

Ocasio-Cortez and Chakrabarti, who served in multiple leadership roles within her campaign including campaign manager, were serving on the board of the Justice Democrats as early as Dec. 2, 2017, according to an archived copy of the PAC’s website.

Cenk Uygur and Kyle Kulinski of The Young Turks network were also on PAC’s board in early December 2017, but Uygur was forced out of the organization Dec. 22, 2017, after what Chakrabarti called “extremely disturbing sexist and racist statements” Uygur made in the early 2000s were unearthed.

Kulinski announced on YouTube the following day that he was resigning from Justice Democrats due to the PAC’s “venomous” Twitter statement urging Uygur’s resignation. Kulinski said he had “strong disagreements with the staff” of Justice Democrats, but added that the PAC’s candidates had “nothing to do with this.”

Board members Ocasio-Cortez and Chakrabarti were left in control over Justice Democrats after Uygur and Kulinski’s departures, according to an archived version of its website saved on March 23, 2018, by the Internet Archive’s Wayback Machine.

“Justice Democrats PAC has a board consisting of Alexandria Ocasio-Cortez and Saikat Chakrabarti that has legal control over the entity,” the Justice Democrats website read that day.

Justice Democrats then reported that Ocasio-Cortez and Chakrabarti were “governors” of the organization in a document submitted to the Washington, D.C. Department of Consumer & Regulatory Affairs on March 28, 2018. A third listed governor was the PAC’s treasurer, Nasim Thompson.

A governor of an organization incorporated in D.C. is any person “under whose authority the powers of an entity are exercised and under whose direction the activities and affairs of the entity are managed,” according to the D.C. Law Library.

The Justice Democrats’ website continued to state that Ocasio-Cortez and Chakrabarti held “legal control over the entity” for weeks after Ocasio-Cortez’s shock primary victory over Crowley on June 26, according to a July 10, 2018 archive of its website.

The Justice Democrats’ website currently states that Alexandra Rojas and Thompson hold legal control of the organization, but the PAC hasn’t filed documents to Washington, D.C. where it’s incorporated reflecting the change, meaning that Ocasio-Cortez and Chakrabarti currently retain majority control of Justice Democrats on paper.

Politico reported Jan. 16 that Chakrabarti resigned from the board, and Justice Democrat’s website no longer listed Ocasio-Cortez as a board member as of Aug. 8, 2018. TheDCNF received the corporation filing document still showing both as governors on Feb. 25. The D.C. government website showed the same as of Monday afternoon.

Ocasio-Cortez’s office and Justice Democrats did not respond to multiple requests for comment.

Posted by Princess Mononoke at 7:03 PM

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