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Unusual Clinton Payments To DNC Create Conflict Of Interest

Hillary Clinton and the Democratic National Committee have an unusual and apparently unprecedented agreement in which an entity she controls has paid nearly $20 million to the political panel, even as its leadership plays a supposedly impartial role in fostering competition between the former secretary of state and her rivals for the party’s 2016 presidential nomination.

Clinton created a “joint fundraising committee” Sept. 10 that funneled big-money donations in excess of the per-campaign limit to the DNC. In the next 20 days, she raised and gave $600,000 to the DNC, and the figure ballooned to $18 million in the fourth quarter, according to newly released figures — a third of her total haul. Normally the party would only team up with a candidate that way if the candidate was the nominee.

“There is clearly an appearance that Clinton’s ability to raise money for the DNC (and states) through her joint fundraising committee could influence the party during the primaries,” Larry Noble, general counsel of the Campaign Legal Center and the former top lawyer for the Federal Election Commission, told The Daily Caller News Foundation.

“Clinton’s ability to raise money for the DNC and Party committees gives her influence with the DNC,” Noble said.

By comparison, President Barack Obama didn’t create a revenue-sharing agreement with the DNC until June 2008 after he had secured enough primary votes to be the Democratic nominee. Former Massachusetts Gov. Mitt Romney didn’t enter into a partnership with the Republican National Committee until April 2012, the month the RNC declared him its presumptive nominee.

A search of federal records showed no previous examples of national parties historically entering into agreements with someone who wasn’t ultimately the nominee.

In order to create a joint fundraising committee, both the party and the candidate must agree to the terms.

While the move on one hand indicates that Clinton believes that she is already the de facto nominee and the competition from Vermont Sen. Bernie Sanders and former Maryland Gov. Martin O’Malley is essentially a show, it may also provide an explanation for the behavior of DNC Chairman Debbie Wasserman Schultz .

Wasserman Schultz has been criticized by Democrats who claim she has favored Clinton by refusing to hold more than six debates, seemingly giving voters little opportunity to be introduced to Clinton alternatives.

The Huffington Post reported shortly after the fundraising committee’s inception that it was “out of the ordinary,” but so far no one has identified its existence as a possible factor in the favoritism the party’s referees have seemingly showed to Clinton.

The rift busted wide open last month, however, with the Sanders campaign filing a lawsuit against the DNC, saying it was showing preference to Clinton after the party barred Sanders from accessing party data. The Vermont senator’s aides saw data intended for Clinton because of a vendor error. The DNC maintains data that is essential to its candidates for campaigning.

“We directed NGP VAN to suspend the Sanders campaign’s access to the system until the DNC is provided with a full accounting of whether or not this information was used and the way in which it was disposed,” Wasserman Shultz wrote. The Sanders staffer who looked at the data was recommended to the campaign for hiring by the DNC.

Sanders’ lawsuit said the ban was “unwarranted” and “unilateral” and broke the contract, under which it was supposed to have 10 days written notice to fix any problems.

The third and most recent debate took place six days before Christmas, when most Americans were more concerned with their holiday plans than politics.

Sanders said a bad date was intentionally picked by DNC officials to help ensure Clinton’s nomination. “I think there is a desire on the part of the DNC to protect Secretary Clinton,” he told WMUR Channel 9 ABC in Manchester, N.H.

“In Iowa, do you know when the debate was held?” Sanders said, referring to the prior debate. “It was the night of the big football game in Iowa. Do you think that’s a coincidence?”

The timing of Clinton’s deal with the DNC coupled with a new Supreme Court ruling, McCutcheon v. FEC, makes her the biggest campaign “bundler” of all time.

The court ruling says that individuals can give $666,000 each to politicians per cycle, instead of the previous limit of $123,000. All of the donors who give to the joint fundraising committee are part of the “one percent,” as the reason for the fund’s existence is to provide an overflow valve so that donors can give more than they can legally contribute to the campaign itself.

The money comes from a who’s who of major industries, such as $33,400 from Charif Souki, CEO of Cheniere Energy, and the same amount from Deven Parekh, managing director of Insight Venture Partners, a private equity firm.

Bundlers are middlemen who collect contributions from wealthy donors and deliver them to another group, getting personal credit in the process. Clinton and other Democrats routinely cast Republicans as beholden to special interests by reason of having accepted money from wealthy individuals.

Strangely, on Nov. 20, the Sanders campaign created its own joint fundraising committee. But because Sanders does not have a base of wealthy supporters, it is unlikely that it has raised much money for the party, if any — tensions between him and the party aside. The Sanders effort has not yet filed any fundraising reports.

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The Sanders campaign would not tell The Daily Caller News Foundation whether the DNC pressured it to create its own joint fundraising committee to establish the appearance of parity, or put any strings in place, such as making it a requirement to access party data. The DNC did not immediately say whether any conflict of interest provisions went along with the early Clinton fundraising partnership, or how it was maintaining a neutral role.

The Clinton campaign did not immediately respond to a request for comment.

Clinton’s unprecedented establishment of a joint fundraising agreement also allows her to play a numbers game to give an impression of strength against Sanders. Clinton can brag that she raised $55 million last quarter compared to Sanders’ $33 million. That makes for a compelling bragging point even though $18 million of Clinton’s haul was raised in the party’s name, and the campaign totals were actually much closer: $37 million to $33 million.

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