AOC, meet the FEC.
Rep. Alexandria Ocasio-Cortez (D-NY) and her chief of staff are facing a fresh Federal Election Commission complaint filed Wednesday, which alleges that AOC and then-campaign manager Saikat Chakrabarti created shadowy political action committees (PACs) to engage in a “subsidy scheme” that allowed them to raise more money than they otherwise would have been able to had they followed FEC rules, Fox reported.
This comes after an FEC complaint last month alleging that Chakrabarti funneled nearly $1 million in political action committee funds to private companies that he owned to hide campaign contributions.
AOC facing fresh FEC complaint
The complaint alleges that Chakrabarti created a shell limited liability company (LLC), Brand New Congress LLC, to provide political consulting services to AOC at discounted rates. The complaint alleges that AOC, Chakrabarti, The Justice Democrats PAC, the Brand New Congress PAC and Brand New Congress LLC sought to “subsidize cheap assistance for Ocasio-Cortez and other candidates at rates far below market value.”
The conservative attorney who filed the complaint, Dan Backer, said the scheme allowed AOC’s campaign to hide “in-kind contributions” in violation of FEC rules. The FEC considers in-kind contributions to be goods and services offered for free or at a lower than unusual rate to a campaign. Backer cited FEC advisory opinions from the 1990s which explained that goods and services provided to a campaign must be provided at fair market value or else disclosed as in-kind contributions.
The complaint alleges that Chakrabarti’s company, Brand New Congress LLC, subsidized the losses with money funneled from The Justice Democrats PAC and the Brand New Congress PAC, essentially allowing AOC’s campaign to hide in-kind contributions. In a May 2018 blog post, the Justice Democrats PAC stated quite openly that the group’s goal was “not to make a profit” and “as such, we made our prices as low as possible while still satisfying the FEC’s requirement.”
Backer is a conservative lawyer who founded the Stop AOC PAC. This is his second complaint against AOC, who characteristically swatted the allegations as bogus and pushed by Republicans and Fox News to make her look bad.
“I mean, it’s conservative interest groups just filing bogus proposals,” Ocasio-Cortez told Fox.
Jail time?
Brand New Congress PAC and Justice Democrats PAC were also named in an FEC complaint last month alleging that AOC and Chakrabarti funneled nearly $1 million in funds from the PACs to Brand New Campaign LLC and Brand New Congress LLC, both shell companies owned by Chakrabarti. The set-up allegedly allowed AOC’s campaign to get around reporting requirements. Essentially, it would have let the shell companies operate as unregistered PACs.
To make things stranger, Chakrabarti co-founded the Brand New Congress PAC and Justice Democrats, and both AOC and Chakrabarti sat on the board of Justice Democrats while she was running. The arrangement led some campaign finance attorneys to opine that something was amiss. Both were quietly removed from the board after the complaint was filed.
Separately, former FEC officials have said that AOC and Chakrabarti could be in legal trouble for failing to disclose that they had leadership roles at Justice Democrats, which supported AOC’s campaign, while she was running her primary campaign for Congress. AOC’s campaign and Justice Democrats collectively raised $4.6 million in 2018, and if the groups could be shown to be willfully affiliated, then “anyone who contributed over $2,700 total to her campaign and the PAC would have made an excessive contribution,” former FEC commissioner Brad Smith said.
Knowingly receiving a combined $25,000 in excessive contributions in a single year could come with a maximum five-year prison sentence.
“If the facts as alleged are true, and a candidate had control over a PAC that was working to get that candidate elected, then that candidate is potentially in very big trouble and may have engaged in multiple violations of federal campaign finance law, including receiving excessive contributions,” former Republican FEC commissioner Hans von Spakovsky told The Daily Caller News Foundation.
Smith told the Daily Caller that “if a complaint were filed, I would think it would trigger a serious investigation” leading to jail time. However, AOC may benefit from the FEC’s sluggishness.
“The FEC has only four commissioners out of its usual slate of six,” Corey Goldstone, media strategist at the watchdog Campaign Legal Center told Fox. “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.”
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