by WorldTribune Staff, March 5, 2019
Rep. Alexandria Ocasio-Cortez would not be in Congress without the Justice Democrats political action committee, an organization which aims to elect progressives with revolutionary potential.
The Justice Democrats PAC was founded by Saikat Chakrabarti, who recruited Ocasio-Cortez to run against longtime establishment Rep. Joseph Crowley in the Democratic Party primary. Chakrabarti is now AOC’s chief of staff.
“It was the Justice Democrats who recruited her in a quixotic campaign early on, providing a neophyte candidate with enough infrastructure to take down a party leader,” David Freedlander noted in an analysis last month for Politico. “And it is the Justice Democrats who see Ocasio-Cortez as just the opening act in an astonishingly ambitious plan to do nothing less than re-imagine liberal politics in America – and do it by whatever means necessary.”
Those means may not all be on the up and up, reports say.
Ocasio-Cortez did not disclose to the Federal Elections Commission (FEC) that she and Chakrabarti controlled the Justice Democrats PAC which was supporting her primary campaign, according to a report by The Daily Caller Foundation.
“Ocasio-Cortez’s office and Justice Democrats did not respond to multiple requests for comment,” the report concluded.
Ocasio-Cortez and Chakrabarti obtained majority control of Justice Democrats PAC in December 2017, according to archived copies of the group’s website. The PAC raised more than $1.8 million prior to AOC’s June primary in New York’s 14th District.
Ocasio-Cortez and Chakrabarti appear to retain their control of the group, according to corporate filings obtained by the Daily Caller.
Republican election attorney Charlie Spies told the Daily Caller: “It looks like the campaign and PAC are under common control and the PAC was funding campaign staff and activities as an alter-ego of the campaign committee, which would be a blatant abuse of the PAC rules.”
Former Republican FEC commissioner Hans von Spakovsky told The Daily Caller: “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.”
If the FEC finds that AOC’s campaign operated in affiliation with the PAC, it would open them up to “massive reporting violations, probably at least some illegal contribution violations exceeding the lawful limits,” former FEC commissioner Brad Smith said.
Ocasio-Cortez and Chakrabarti could face prison time if the FEC determines that they knowingly and willfully withheld their ties between the campaign and the PAC from the FEC to bypass campaign contribution limits, according to Smith.
If the FEC concludes that Ocasio-Cortez’s campaign and Justice Democrats were operating as affiliated committees, “then anyone who contributed over $2,700 total to her campaign and the PAC would have made an excessive contribution,” which is a campaign finance violation, Smith told the Daily Caller.
Ocasio-Cortez’s campaign and Justice Democrats raised a combined $4.6 million during the 2018 midterm election cycle, FEC records show. There’s a maximum five-year prison sentence for anyone who knowingly and willfully receives a collective $25,000 or more in excessive campaign contributions in a single calendar year.
Justice Democrats raked in far more than $25,000 from individual contributors of over $2,700 after Ocasio-Cortez and Chakrabarti took control, according to FEC records.
“If this were determined to be knowing and willful, they could be facing jail time,” Smith said. “Even if it’s not knowing and willful, it would be a clear civil violation of the act, which would require disgorgement of the contributions and civil penalties. I think they’ve got some real issues here.”
Justice Democrats stated on its website from December 2017 until two weeks after Ocasio-Cortez’s June 2018 primary victory that she and Chakrabarti held “legal control” of the PAC, and corporate filings obtained by the Daily Caller show that the two still serve on the three-member board of Justice Democrats on paper.
According to federal election law, political committees are affiliated if they are “established, financed, maintained or controlled by … the same person or group of persons.”
“At minimum, there’s a lot of smoke there, and if there are really only three board members and she and [Chakrabarti] are two of them, sure looks like you can see the blaze,” Smith said. “I don’t really see any way out of it.”
Smith added: “The admission makes it open and shut if someone wants to file a complaint with the FEC. I don’t see how the FEC could not investigate that. We’ve even got their own statement on their website that they control the organization. I don’t see how you could avoid an investigation on that.”
A complaint filed with the FEC on March 4 claims that Chakrabarti funneled over $1 million in political donations into two of his own private companies.
“Chakrabarti’s companies appear to have been set up for the sole purpose of obscuring how the political donations were used,” the Washington Examiner noted in a March 4 report.
The complaint filed by the National Legal and Policy Center said that Chakrabarti’s arrangement skirted reporting requirements and may have violated the $5,000 limit on contributions from federal PACs to candidates.
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 founded a PAC called Brand New Congress in 2016 and Justice Democrats in 2017, with the stated goal of helping elect progressive candidates to Congress. One of those candidates was Ocasio-Cortez.
In 2016 and 2017, the PACs transferred over $1 million to two shell companies controlled by Chakrabarti, Brand New Campaign LLC and Brand New Congress LLC, according to federal election filings.
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, the Washington Examiner noted.
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 of the arrangement: “None of that makes any sense. I can’t even begin to disentangle that. They’re either confused or they’re trying to conceal something.”
Noti added: “It does seem like there’s something amiss. I can only think of really two likely possibilities for this sort of pattern of disbursements. 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.”
According to the Washington Examiner’s Alana Goodman, “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.”