Ocasio-Cortez’s Campaign Funneled $1m in 'Dark Money' Through Slush Fund
AOC's chief of staff passed political donations cash through his private companies
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Rep. Alexandria Ocasio-Cortez's top campaign aide used two political action committees (PACs) to funnel over $1 million in political donations through two of his own private companies, according to a complaint filed with the FEC on Monday.
The Federal Election Commission has been called on to investigate the cash transfers from the PACs that were founded by Ocasio-Cortez's Chief of Staff Saikat Chakrabarti.
The news from the Democratic socialist's camp runs counter to her pledges to increase transparency and tackle the influence of "dark money" in politics.
Dark money is funds given to nonprofit organizations that can receive unlimited donations from corporations, individuals and unions that is then spent on influencing elections, without the requirement to disclose their donors.
Chakrabarti's companies appear to have been set up for the sole purpose of funneling dark money to obscure how the political donations were used.
By transferring the money with such an arrangement, AOC's campaign is able to skirt reporting requirements and likely violated the $5,000 limit on contributions from federal PACs to candidates, according to the complaint filed by the government watchdog group, National Legal and Policy Center.
Campaign finance attorneys say the moving of funds in such a way is an indication "there’s something amiss," describing the arrangement as “really weird.”
They said there was no way of tracing where the political donations went.
Without being able to trace the funds, they could have been pocketed or used by the company to pay for off-the-books campaign operations, according to legal experts.
PACs are legally required to disclose how and when funds are spent, including for expenditures such as advertisements, donations to candidates, fundraising emails, and payments for events and to vendors.
These legal requirements are not extended to the private companies to which Chakrabarti transferred the money from the PACs.
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According to the Washington Times, 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.
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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."
