Clinton Campaign Finances: Legal Or Illegal?

Hillary Clinton's 2016 presidential campaign was marred by allegations of illegal campaign coordination with the super PAC Correct the Record. The Campaign Legal Center (CLC) sued the FEC, arguing that the Clinton campaign and Correct the Record had violated campaign finance laws by failing to disclose millions of dollars in coordinated expenditures. The CLC won the case, but the FEC refused to conform to the court's decision, leading the CLC to file a citizen suit against both parties.

Separately, Clinton's campaign and the Democratic National Committee (DNC) were fined by the FEC for misreporting the funding of the infamous Trump-Russia dossier. While the DNC and Clinton campaign claimed the payments were for legal services and legal and compliance consulting, they were actually used to hire opposition research company Fusion GPS, which in turn hired former British spy Christopher Steele to compile the dossier.

Election law experts are divided on whether Clinton violated any laws in hiring Steele, with some arguing that she broke rules on foreign contributions to campaigns, and others emphasising potential disclosure violations.

Hillary Clinton's 2016 campaign was fined for not disclosing spending on opposition research

Hillary Clinton's 2016 presidential campaign was fined for failing to properly disclose the money spent on opposition research. The Federal Election Commission (FEC) fined Clinton's campaign $8,000 and the Democratic National Committee (DNC) $105,000. The FEC found that the Clinton campaign and the DNC had misreported the funding of the Trump-Russia dossier, labelling it as "legal services" and "legal and compliance consulting" instead of opposition research.

Political candidates and groups in the US are legally required to publicly disclose their spending to the FEC and explain the purpose of any expenditure over $200. The Clinton campaign and the DNC paid over $1 million to the law firm Perkins Coie, which then hired Fusion GPS to conduct opposition research. Fusion GPS then hired former British intelligence officer Christopher Steele to create the dossier.

The dossier contained unverified allegations about Donald Trump's alleged links to Russia and claims that his campaign colluded with the Kremlin to win the 2016 election. While a few allegations were corroborated, much of the information in the dossier has been refuted. Steele maintained that his research was not meant for public viewing and that it required further investigation.

The Clinton campaign and the DNC did not admit to violating campaign finance laws but agreed to accept the civil fines to settle the matter. The FEC also dismissed related complaints against Steele, Perkins Coie, and Fusion GPS.

The Clinton campaign was accused of violating campaign finance law

Hillary Clinton's 2016 presidential campaign was accused of violating campaign finance law. The Clinton campaign was suspected of paying for former British spy Christopher Steele's "dossier", which claimed that Russia may have had incriminating information on Donald Trump. The role of the Clinton campaign and the Democratic National Committee (DNC) was confirmed by multiple news outlets.

The Clinton campaign and the DNC funded Fusion GPS's research through the law firm Perkins Coie. The law firm was paid approximately $5.6 million in legal fees by the Clinton campaign and $3.6 million by the DNC for "legal and compliance consulting". An unknown share of this money reportedly went to Fusion GPS, which paid Steele.

The Campaign Legal Center filed a complaint with the Federal Election Commission (FEC) in October 2017, accusing the Clinton campaign and the DNC of violating campaign finance law by failing to accurately disclose the money spent on the dossier. The complaint argued that the arrangement with Fusion GPS may have violated campaign finance regulations, as political committees must accurately report expenditures over $200 to the FEC.

The Clinton campaign and the DNC listed payments to Perkins Coie for legal services in their campaign reports but did not disclose any payments for opposition research. Jan Baran, an election law expert, stated that the Clinton campaign could be "in trouble for not accurately disclosing its payments to the law firm" on FEC filings.

In response to the allegations, a person close to the Clinton campaign pushed back, calling the idea that hiring foreigners would trigger a foreign contribution violation a "crazy stupid theory". They argued that there is a difference between paying for merchandise manufactured abroad and paying for foreign opposition research.

However, attorney and Republican election law expert Cleta Mitchell disagreed, stating that there is a "strong public policy" prohibiting paying or receiving anything of value from a foreign national in a U.S. campaign. Mitchell pointed to the FEC regulation 11 CFR 110.20, which explains the statute prohibiting foreign nationals from making contributions, disbursements, expenditures, or independent expenditures in U.S. elections.

The FEC's general counsel recommended investigating the matter, but the agency deadlocked, voting 2-2 on whether to follow the recommendation. The Campaign Legal Center then sued the FEC, arguing that its dismissal of the complaint was "arbitrary, capricious, and an abuse of discretion". A district court held that the FEC had acted contrary to the law in dismissing the complaint and ordered the FEC to conform with its decision, but the FEC refused to do so.

The Clinton campaign's response to the allegations and the specific legal consequences of the alleged violations are not entirely clear, and election law experts are divided on the matter.

Clinton's campaign allegedly coordinated with the super PAC Correct the Record

In 2016, Hillary Clinton ran for president of the United States as the Democratic Party's candidate. Her campaign allegedly coordinated with the super PAC Correct the Record, which was founded by David Brock.

Correct the Record was a hybrid PAC/super PAC that supported Clinton's 2016 presidential campaign. The PAC aimed to "find and confront social media users" who posted "unflattering messages" about Clinton. It coordinated with Clinton's campaign via a loophole in campaign finance law, which permits coordination with digital campaigns.

In October 2016, the Campaign Legal Center (CLC) filed a complaint with the FEC, alleging that Correct the Record had made, and the Clinton campaign had received, millions of dollars in illegal, unreported, and excessive in-kind contributions in the form of coordinated expenditures. Under federal law, an individual could only contribute $2,700 to Clinton's campaign in 2016. However, as an "independent" super PAC, Correct the Record could accept unlimited amounts from individual donors or corporations, as long as it did not coordinate with the Clinton campaign.

Despite spending over $9 million on opposition research, campaign spokesperson training, video production, press outreach, and other activities—many of which were conducted in coordination with the Clinton campaign—the Clinton campaign never reported receiving in-kind contributions from Correct the Record, and Correct the Record never reported the activities as contributions.

Following CLC's complaint, the FEC's general counsel recommended that the agency investigate the matter. However, the FEC deadlocked, voting 2-2 on whether to follow the recommendation. CLC sued, arguing that the FEC's dismissal of the complaint was "arbitrary, capricious, and an abuse of discretion, and otherwise contrary to the law." The district court held that the FEC had acted contrary to the law in dismissing CLC's complaint and ordered the FEC to conform with its decision within 30 days, but the FEC refused.

As a result, CLC filed a citizen suit against Correct the Record and the Clinton campaign, seeking to declare that they violated the Federal Election Campaign Act and provide information on the millions of dollars of in-kind contributions made and received. The failure to hold Correct the Record and the Clinton campaign accountable created a loophole for outside groups to funnel millions of dollars of over-the-limit contributions to federal candidates, while also concealing the sources of financial support from public scrutiny.

The Clinton campaign was suspected of paying for the Steele dossier

The Clinton campaign and the Democratic National Committee (DNC) were suspected of paying for the Steele dossier, which was compiled by former British spy Christopher Steele. The dossier was a report on the 2016 presidential campaign of Donald Trump, containing unverified allegations of misconduct, conspiracy, and cooperation between Trump's presidential campaign and the Russian government.

The Clinton campaign and the DNC hired the law firm Perkins Coie, which then retained Fusion GPS, a research and intelligence firm, to conduct opposition research on Republican candidate Donald Trump's ties to Russia. Fusion GPS then hired Steele and his private intelligence firm, Orbis Business Intelligence, to look into the connections between Trump and Russia.

The Clinton campaign and the DNC were accused of violating campaign finance laws by failing to accurately disclose the money spent on the dossier. In March 2022, the FEC found probable cause to believe that the DNC and the Clinton campaign had misreported the purpose of certain disbursements, classifying the spending as "legal services" and "legal and compliance consulting" instead of opposition research. As a result, the FEC fined the DNC $105,000 and the Clinton campaign $8,000.

Clinton's campaign was criticised for accepting large donations from wealthy donors

Hillary Clinton's 2016 presidential campaign was criticised for accepting large donations from wealthy donors. Clinton's campaign had access to a large donor network, experienced operatives, and political action committees (PACs). This network of donors included "lawmakers, entertainment icons and titans of industry", such as Ben Affleck, George Lucas, Marissa Mayer, and Sheryl Sandberg. Clinton's campaign also received substantial funding from super PACs, which can accept unlimited amounts from individual donors or corporations.

One such super PAC was Correct the Record (CTR), which spent over $9 million in coordination with Clinton's campaign. CTR's spending was supposed to be independent of the Clinton campaign, but by CTR's own admission, many of its activities were coordinated with the campaign. Despite this, the Clinton campaign never reported receiving in-kind contributions from CTR, and CTR never reported its activities as contributions. This led to a lawsuit from the Campaign Legal Center, which accused CTR and the Clinton campaign of violating the Federal Election Campaign Act.

In addition to CTR, other super PACs that supported Clinton include Ready PAC, Priorities USA Action, and Correct the Record. Priorities USA Action raised $23.4 million in August 2016, with more than half of that amount coming from its top five donors.

Clinton's campaign was also criticised for its arrangement with Fusion GPS, a firm that was hired by the Democratic National Committee (DNC) and the Clinton campaign through a law firm. The Clinton campaign and the DNC reportedly funnelled money to Fusion GPS through the law firm Perkins Coie, which received $5.6 million from the Clinton campaign and $3.6 million from the DNC. This arrangement may have violated campaign finance regulations, as political committees are required to accurately report expenditures over $200 to the Federal Election Commission.

Despite the criticism and legal challenges, it is important to note that Clinton's campaign did not violate any laws regarding campaign donations. The Federal Election Commission expert Jan Baran stated that it is not illegal for campaigns to hire opposition research firms or accept donations from super PACs. However, he added that the Clinton campaign could be in trouble for not accurately disclosing its payments to the law firm Perkins Coie.

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