Outside billionaires fuel joint effort between Clinton, Alaska Democrats

The Alaska Democratic Party has collected more than $40,000 from a political committee tied to the presidential campaign of Hillary Clinton that raises money from billionaire donors, complicating the party's message as it calls for campaign finance reform.

The party, in a monthly report filed Friday with the Federal Election Commission, said it raised $43,500 from the Hillary Victory Fund, with $10,000 donations from billionaires, including hedge fund manager S. Donald Sussman and Hyatt hotel heir J.B. Pritzker.

In the same report, the Alaska Democratic Party said it transferred an equal amount of money, $43,500, to the Democratic National Committee -- a move that, while legal, helps to effectively "obliterate" federal limits on donations to the national committee, according to one campaign finance expert.

"It just becomes a way to give more to the DNC to support the Clinton campaign," said Paul S. Ryan, deputy executive director of the Campaign Legal Center, which advocates for campaign finance reform. "It's effectively Hillary Clinton's team soliciting Hillary Clinton's supporters for much bigger checks than they can give to the campaign -- knowing that every penny could be spent on the Clinton campaign."

Clinton is the frontrunner for the Democratic presidential nomination, though she faces an insurgent challenge to her left from Bernie Sanders, the Vermont senator.

Her campaign, along with the DNC, in September registered the Hillary Victory Fund, which in a subsequent filing said it would also raise money for the Alaska Democratic Party and 31 other state-level Democratic committees.

The New York Times reported that Clinton and former President Bill Clinton were scheduled to hold the first fundraiser for the Hillary Victory Fund last week in New York City, with a performance by the singer Sting.


The fund -- technically called a "joint fundraising committee" -- takes advantage of a 2014 Supreme Court ruling, the McCutcheon decision, that eliminated a $75,000 cap on the total amount of money that individuals could give to political parties and committees during a two-year election cycle.

McCutcheon was the second 5-4 decision, following the 2010 Citizens United ruling, loosening campaign finance rules and allowing for much larger contributions to federal elections by individuals, unions and corporations -- over Democratic objections.

Joint fundraising committees like Clinton's, Ryan said, are created "for the convenience of donors -- so a donor can write a huge check to a single entity rather than having to write a bunch of smaller checks."

Now, donors can give as much as $350,000 to Clinton's fund, to be divided between her campaign, the DNC and the 32 participating state-level Democratic committees. Those committees can spend the money themselves, or, like the Alaska Democrats, send the cash back to the DNC, since state-level parties can make unlimited transfers to their national affiliates -- a move that Ryan said effectively allows the DNC to raise far more than the $33,400 legal limit on direct donations from individuals.

Other state-level Democratic committees last month also transferred the same amount of money to the DNC that they received from the Clinton fundraising committee. Wyoming's transferred $19,500 to a corporation affiliated with the DNC, while Georgia's and Idaho's each transferred $43,500 directly to the DNC.

The big donations collected by Clinton's fund come in spite of the candidate's call on her own website to "end the stranglehold that wealthy interests have over our political system and restore a government of, by, and for the people -- not just the wealthy and well-connected."

The Alaska Democratic Party, meanwhile, criticized the McCutcheon ruling last year, saying it "allows multi-millionaires further financial leverage in elections."

Clinton's campaign didn't respond to a request for comment. In a phone interview Monday, Kay Brown, the Alaska Democratic Party's executive director, defended the arrangement with Clinton and the DNC as both legal and necessary to avoid losing ground to Republicans who are also trying to capitalize on the new campaign finance landscape.

The party said in a statement in September that it would not "unilaterally disarm" while pursuing campaign finance reforms.

"We're abiding by the rules and attempting to be competitive in this environment," Brown said Monday, describing the Alaska Democrats as an "arm of the DNC" with the ability to "move money back and forth."

"It takes money to run the party," she added. "It takes money to elect candidates to office."

The money transferred to the DNC, Brown said, is used for the party's voter database and for research -- not for the benefit of a particular candidate.

"The DNC is neutral and is obligated to be so, as is the state party, before the primary," she said.

The Hillary Victory Fund contributors listed on the Alaska Democratic Party's report -- none of whom are from Alaska -- are some of the Clinton family's "greatest hits," said Richard Skinner, a policy analyst with the Sunlight Foundation.

"These are, like, their best fundraising people ever," he said.

Several of the $10,000 donors listed on the Alaska Democratic Party's report Friday have donated the maximum of more than $350,000 to the Clinton fund, including Pritzer and his wife, Mary; clothing company founder Susie Tompkins Buell; and retired media executive Fred Eychaner.

Sanders' campaign, which focuses on small donations and has already received more than 2 million contributions, didn't respond to a request for comment. Paul Oliva, an organizer for Sanders' campaign in Alaska, said the candidate's supporters were initially "taken aback" to learn that the state Democratic party had joined with Clinton's fund, though after learning more he's concluded that it's "upstanding and OK."


"Basically, it's a good business deal for the party, and it's all going to go to the nominee eventually, so I'm not too stressed out about it," said Oliva, who's also the president of the University of Alaska Anchorage College Democrats. "It would just be hamstringing ourselves if we didn't raise these kinds of money."

Republican presidential candidates have received tens of millions of dollars in contributions for the super PACs that support them, but those committees aren't allowed to coordinate their work with the parties or candidates -- and so far, the Alaska Republican Party hasn't reported raising money from the same type of fund as Clinton's.

That's in spite of the fact that Shaun McCutcheon, the plaintiff in last year's Supreme Court case, is a Republican, and the ruling, said Skinner, the Sunlight Foundation policy analyst, "was always the kind of thing the Republicans were going to exploit the most."

Currently, he added, it appears that the GOP candidates are more focused on winning the hotly contested nomination than on raising money for their party committees -- though Republican U.S. Sen. Lisa Murkowski does have her own joint fundraising committee that raises money from the energy industry.

State Sen. Bill Wielechowski, an Anchorage Democrat who's pushed for campaign finance reform, said in a phone interview Monday that he thinks the federal rules should be tightened. But until then, he added, he won't object to his own party raising money in ways that allow it to "compete financially."

"Until it changes, I can't fault anybody for playing by the rules," he said. "You've got an election coming up, and if you don't raise these funds, you are basically going into an election with one or two hands tied behind your back."

Nathaniel Herz

Anchorage-based independent journalist Nathaniel Herz has been a reporter in Alaska for nearly a decade, with stints at the Anchorage Daily News and Alaska Public Media. Read his newsletter, Northern Journal, at natherz.substack.com