AOC Hit with FEC Complaint Week After Telling Followers To 'Pause' Donations
Ocasio Cortez and her campaign manager allegedly violated campaign laws
Rep. Alexandria Ocasio Cortez, D-N.Y., has been met with yet another Federal Election Commission (FEC) complaint alleging she and her campaign manager ran a “subsidy scheme” which violated campaign laws.
The news comes one week after the progressive Democrat told millions of followers to 'pause' donations to House Democrats’ official campaign arm.
The complaint, which was reported by Fox News, accuses Ocasio-Cortez and her campaign manager, Saikat Chakrabarti, of managing a "shadowy web" of political action committees (PACs) which allowed them to raise more cash.
A limited liability company (LLC) was also created to bypass federal expenditure requirements by offering AOC and other Democrats special consulting services at such a low price that the company folded before the election ended.
According to the complaint, it named Ocasio-Cortez, Chakrabarti, the Justice Democrats PAC, and New Congress LLC, and the Brand New Congress PAC, as the entities trying to “subsidize cheap assistance for Ocasio-Cortez and other candidates at rates far below market value.”
A now -defunct company owned by Chakrabarti is a the center of the complaint, which looked to employ up to 400 candidates for national office and “fully run all of their campaigns,” Justice Democrats PAC website said.
“Chakrabarti was trying to create the Uber for politics,” said Dan Backer, the conservative attorney behind the complaint.
“Uber functions because of a massive subsidy from venture capital. Here, it’s subsidized by these PACs to deliver a valuable service that people need and want, but can’t be delivered at the real cost of it.”
This is Ocasio-Cortez's second FEC complaint in less than a month.
The last complaint was lodged with the Office of Congressional Ethics over the congresswomen granting Roberts access to the congressional email server.
We recently reported Ocasio-Cortez was accused of funneling thousands of dollars from her campaign to her boyfriend, Riley Roberts, through an allied PAC.
Backer says that Brand New Congress LLC was found to be f giving campaign contributions known as "in-kind" expenditures by only charging candidates for a portion of cost the service.
He says the problem was because of a series of 1990s-era FEC Advisory Opinions which explained that goods and services provided to political campaigns must be paid for at fair market value. Otherwise, they could be deemed in-kind contributions.
The @DCCC’s new rule to blacklist+boycott anyone who does business w/ primary challengers is extremely divisive & harmful to the party.— Alexandria Ocasio-Cortez (@AOC) March 30, 2019
My recommendation, if you’re a small-dollar donor: pause your donations to DCCC & give directly to swing candidates instead.
Some great ones:
It was not clear what t Chakrabarti and Brand New Congress charged, and Backer says this was the issue.
He added that the private company would not be under the same transparency and disclosure laws that PACs are.
According to a May 2018 blog post, the Justice Democrats PAC revealed it was offering services at an unprofitable rate, and that was the point.
"[The] goal of creating the LLC was not to make a profit," the post read, "and as such, we made our prices as low as possible while still satisfying the FEC's requirement that we are charging something reasonable because, again, if we weren't we would essentially be doing heavily discounted work for candidates and that is illegal and immoral since fighting dark money is literally what we want to do."
According to Fox News: Also driving the complaint were the overlapping leadership roles of Ocasio-Cortez and Chakrabarti on the implicated organizations. Ocasio-Cortez was in charge of her campaign while simultaneously serving as a board member of the Justice Democrats PAC.
Her dual role isn’t unusual, according to Brendan Quinn, a spokesman for the Center for Responsive Politics. He said it hasn’t been out of the ordinary for members of Congress to sit on boards of multiple PACs, nor is it illegal or improper.
Backer said Chakrabarti, however, “was on all sides of the scheme.”
He owned Brand New Congress LLC, sat on the board of the Justice Democrats PAC and co-founded the Brand New Congress PAC—all while serving as Ocasio-Cortez’s campaign manager.
Coming to a conclusion in the complaint may be a lengthy process, though.
“The FEC has only four commissioners out of its usual slate of six,” said Corey Goldstone.
“Since federal law requires at least four votes on the six-member commission to take official action, the FEC can barely lift a finger even when violations are clear and obvious. In this case, it’s not clear there was any wrongdoing, and the allegations seem speculative. We haven’t seen evidence that the PACs improperly subsidized work for the campaign or have reason to believe that laws were broken.”
Backer said he expected the gridlock at the FEC and planned to sue if his complaints sit for 120 days and litigation is allowed under law.
“At the end of the day," Backer said.
"It would be wonderful if the FEC would get off its dysfunctional ass and rule on these things."