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| - “We raised more money in January, for instance, of 2018 than any January in our history. So if the question is, ‘Do we have enough money to implement our game plan?’ Absolutely.”
— Democratic National Committee Chairman Tom Perez, in a C-SPAN interview, March 2, 2018
Pressed about these lopsided financials on C-SPAN, Perez said he was upbeat about the DNC’s resources heading into the congressional midterm elections. Democrats, he said, raised more money in January 2018 than in any previous January. (The DNC was founded in 1848.)
“When I read stories that the Republicans outraised the Democrats, that’s kind of a dog-bites-man story,” Perez said. “They’ve got a lot more rich donors than we do.”
The DNC says it raised “nearly $7 million” in January, calling it the biggest monthly haul since Perez became chairman in February 2017. Was it the best January in the DNC’s history?
The Facts
The DNC had a gnarly 2016, targeted by Russian hackers and riven by the presidential primary between Hillary Clinton and Sen. Bernie Sanders (I-Vt.). With President Trump in office, Democratic voters appear to be energized heading into the midterm elections, and Perez says the wind is at their backs.
But it takes cash — or rather, TV ads, lawn signs, phone banks and such — to translate that energy into more seats in Congress. Candidates raise their own money, but national committees like the DNC play a big supporting role.
The DNC raised $6 million in January 2018, according to its most recent filing with the Federal Election Commission. That was below what it raised in January 2014 ($6.6 million), January 2012 ($13.2 million), January 2011 ($7.1 million) and January 2010 ($9.1 million).
DNC spokesman Michael Tyler said Perez had a slip of the tongue on C-SPAN and did not mean to claim a historical record. “Tom meant to say that we raised more money in January than we had in any January since 2012,” Tyler said. It’s quite a blunder, since the DNC’s history began 164 years before 2012, but at least Perez is conceding the error.
What about the $6.6 million raised in January 2014, though? For those keeping score, that’s more than half a million dollars more than in January 2018.
Tyler said that for January 2018, the DNC is counting its own fundraising ($6 million) and “nearly $1 million” raised by a separate entity, the Democratic Grassroots Victory Fund. The grand total comes to “nearly $7 million.” (The DNC did not say specifically how much the victory fund raised, and that fund has not yet filed a report with the FEC covering January 2018.)
Long story short, the DNC has found a new way of tallying its fundraising.
The Democratic Grassroots Victory Fund is a new addition to the family, having been established in October 2017. It’s a joint fundraising committee made up of 52 entities: the DNC and the party committees in all 50 states and the District of Columbia.
In theory, all 52 committees are raising funds. But in January, all the money (“nearly $1 million”) was raised by the DNC, Tyler said.
Although the group has the word “grassroots” in its name, the Democratic Grassroots Victory Fund appears to be a vehicle for high-dollar donations from wealthy donors. In its first three months, from October to December, the fund raised $2.6 million from six individuals. The biggest check, for $829,000, came from Cynthia Simon Skjodt of Indiana, the daughter of the late mall tycoon Melvin Simon. Another daughter, Deborah Simon, gave $729,000.
Lawrence Noble, general counsel of the Campaign Legal Center, said joint fundraising committees are not unlike super PACs in that they both offer donors and campaigns a way to get around the legal contribution limits for individual candidates.
“You’ll see the presidential candidate, the national party committee, and the state party committees [teaming up],” Noble said. “It allows them to add up all the individual contribution limits they have, and then we’ll split it, so that no one goes over the limit.”
He added, “This allows them to tap into very wealthy individuals who write one check, and those individuals often don’t care where the money is going.”
Clinton and Trump both ran joint fundraising committees in 2016 with the DNC and the RNC, respectively, and state-level party organizations. Trump’s joint committee raised $108 million, and Clinton’s raised $530 million, according to Open Secrets.
“Because of its structure, the new Democratic Grassroots Victory Fund appears to be able to solicit more than $540,000 per individual donor per year — or about $1.1 million per year from married couples,” according to the watchdog group Issue One. “Some couples may be able to donate more than $2 million to this group before the 2018 election. These figures could increase even more — by hundreds of thousands of dollars — if the Democratic National Committee also uses this joint fundraising operation to raise money for its building and recount funds.”
It’s not the first time the DNC has used a combined fundraising total for both committees; the practice started soon after the DGVF was established. For December, the DNC gave a preview of its monthly fundraising figures to Politico by including both piles of money. For October, the DNC gave CNN a breakdown of what it raised and what the joint fundraising committee raised on top.
Previously, the DNC would report only what it raised itself, even though it participated in a joint fundraising committee in 2016, with Clinton’s campaign.
The RNC, on the other hand, does not include in its monthly totals what it raises in partnership with Trump’s joint fundraising committee. An RNC spokesman, Michael Ahrens, said the Democrats appeared to be “inflating their numbers.”
“By contrast, RNC Chair Ronna McDaniel’s record fundraising means Republicans have the money to compete in 2018 and beyond,” Ahrens said. The DNC had $7.3 million cash on hand at the end of January, and $5.6 million in debt, compared with the RNC’s $40.75 million cash on hand and no debt, according to FEC reports.
Finally, it’s worth noting that the DNC appears to have siphoned $842,000 from the joint committee in November, according to FEC records. It doesn’t affect January’s fundraising total. But it sets a precedent that the DNC could repeat. As Noble said, “transfers between party committees are unlimited.”
The Pinocchio Test
Perez said the DNC set a new fundraising record for the month of January. But his spokesman backed off from those comments when we reached out with FEC figures that told a different story. Otherwise, Perez was headed for Four Pinocchios.
Although we don’t award Pinocchios when a politician admits error, the response from Perez’s spokesman raised new questions. The DNC now uses monthly fundraising totals that merge its own numbers with whatever is raised by a different entity called the Democratic Grassroots Victory Fund.
This is a break from tradition, and it blurs the lines of a complicated financial arrangement.
For the month of January, for example, the DNC said it handled all the fundraising for itself and the DGVF, gathering “nearly $7 million” in total. That’s all well and good. But this kind of reporting makes sense only if the DNC does all the fundraising for both groups every month.
The DNC is one of 52 entities in the joint fundraising committee. At some point, one of the other groups will chime in with a check, and then what? Who gets the credit for that?
This elaborate construct may help the DNC chairman save face, but only by sacrificing clarity and hampering voters’ understanding of campaign finance. We were on the fence between Two and Three Pinocchios for this one, but in the end Perez’s revised statement merits Two Pinocchios. The numbers add up, but the spin is misleading.
Two Pinocchios
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