Commingling Foreign Funds In A Political Organization IS A BFD. Here's Why.

Ed Gillespie. Karl Rove. Bob Schieffer. Associated Press. George Will. Politico. ABC. The list goes on and on with names and media outlets spinning the issue of foreign funds being injected into our elections as a trifling matter, unworthy of our
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Ed Gillespie. Karl Rove. Bob Schieffer. Associated Press. George Will. Politico. ABC. The list goes on and on with names and media outlets spinning the issue of foreign funds being injected into our elections as a trifling matter, unworthy of our attention.

It's not trifling; it's a major big deal, but I don't think anyone has done an especially good job of explaining it, so I'm going to give it my best shot.

All of the denials and debunkers seem to center around the Chamber of Commerce's insistence that AmCham funds just don't amount to much. Click any article above and you'll find Bruce Josten's vehement denial that AmCham funds are scrupulously segregated and separate from other funds. Yet they fail to mention money flowing in from the Business Councils, and what they ignore even more is that the Chamber of Commerce, by their own admission, can accept as much money as they want from any member - foreign or domestic -- without reporting, disclosing, or otherwise telling anyone about it.

In August of this year, before any news of foreign contributions came out, a Chamber of Commerce employee (and whistleblower) wrote a letter outlining how the Chamber handles donations in excess of annual dues:

According to a letter from a U.S. Chamber of Commerce employee, who wishes to remain anonymous, companies that give money to the Chamber are promised their donations will not be disclosed, even to the Government.

[...]

They are given specific instructions on how to circumvent campaign finance regulations. This is what Mr. Donohue uses to up the ante with companies so they will give more money. Mr. Donohue has given these same instructions to our lobbyists to pass on to companies... Mr. Donohue also promises companies that the Chamber's lawyers, lobbyists and public relations will provide a wall of protection for them in case they have any troubles with regulators or law enforcement officials, and he uses examples of past members who have been able to hide behind the Chamber.... It is a fact that the Chamber coordinates directly with the Republican Party on issues, ads, legislation, candidates and everything else. Steve Law is in daily contact with Mr. Donohue and he was chosen to lead the Karl Rove group American Crossroads so there would be that coordination. That group is the de facto Republican National Committee.

["I can say for certain that there is a vast amount of secrecy about what money comes in and what it is used for. I can say that there have been large cash transactions that have taken place that I do not believe have been ever placed in any accounting system. I also know that money meant for one thing has actually been redirected to another thing on orders from Mr. Donohue and without the knowledge of the company that gave the money. I also know that if there was an audit done of the Chamber's finances and cross referenced to those companies that gave money, there would be vast discrepancies between income and outlays."]

See that last bolded section there? That's why these foreign funds are a huge, major big deal. Here's a hypothetical to illustrate how the money could flow.

US Chamber of Commerce decides they want to make a $5 million ad buy. They look in their US funds account and there's $2.5 million there today, but they're expecting another News Corp contribution of $2.5 million toward the ad buy. Because the News Corp contribution hasn't arrived yet, and because they have operating expenses to meet in the same week, they're cash-poor. Remember, everything is commingled by their own admission. They only split the accounting on paper.

So really, there's $5 million in the account today, and they can slide the money they 'borrow' from the foreign funds account back to the column on the other side of the journal as soon as the Murdoch contribution arrives. Ads hit the major markets with key timing and....mission accomplished.

They can make denials until they're blue in the face, but it doesn't change the very real fact that the US Chamber of Commerce is structured to accept far more than dues payments. If BP wants to put some lobbying money into the US Chamber, there really isn't any way for us to know that, even at the time the 990 is filed. Nothing bars them from accepting foreign money for dues and donations. They're only barred from spending it on US election communications, but as I've shown, that doesn't stop it from being laundered to look like US funds. It all comes down to cash flow.

Now when Ed Gillespie says stupid things like he did yesterday about enemies lists and the like, he's just blowing smoke, as are the media outlets and everyone else grouping around the "they hardly get any money from foreign sources" reply. Until they produce books showing that the funds are physically segregated in accounts completely separate from the accounts they use to pay for their advertising campaigns, the burden of proof is on them.

This is a very, very BFD. It was big enough without the foreign donor issues to warrant one attorney requesting that they retain all emails, accounting records and other documents related to their campaign finance activities. It is now big enough that it has earned the attention of the President, who is rightly letting everyone know at every campaign stop what they appear to be doing.

Until they produce documents proving their accounting methods don't launder foreign money, it's safe to assume they are indeed, probably laundering foreign money.

Also, the 40,000 pages of documents reporting and DISCLOSING donors to Barack Obama's Presidential campaign are available to anyone on the FEC website. Yes, that's right. Every dang donor was disclosed, so let's just move right along to the next excuse, shall we?

A bonus: EJ Dionne on the shadow class war.

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