WASHINGTON (AP) — Freshman New York Rep. Alexandria Ocasio-Cortez and several of her allies were accused this week by a conservative group of improperly masking political spending during the 2018 campaign. Ocasio-Cortez is a vocal critic of untraceable money in politics, and the news provoked uproar from conservative media organizations. Campaign finance experts, however, caution that there is no evidence of wrongdoing. The Associated Press explains:
HOW DID WE GET HERE?
The conservative National Legal and Policy Center argued in a complaint to the Federal Election Commission on Sunday that Ocasio-Cortez and her allies “orchestrated an extensive off-the-books operation.” They requested an investigation, charging that political groups tied to Ocasio-Cortez and her advisers improperly obscured how money that they raised was spent. It was quickly snapped up by conservative media outlets like the Daily Caller and Washington Examiner, as well as tabloids like the New York Post.
HOW DID THE OPERATION WORK?
Ocasio-Cortez’s current chief of staff Saikat Chakrabarti helped found two groups, Justice Democrats and Brand New Congress, that aimed to elect progressive candidates to office. Ocasio-Cortez is also listed as a “governor” of Justice Democrats in a business filing.
Records show that in 2016 and 2017 political action committees operated by the groups paid over $1 million to a company that Chakrabarti also ran, which was called Brand New Congress LLC.
Limited liability companies are a tool sometimes used in politics to obscure the flow of money.
Ordinarily, individual campaign expenses are reported to the FEC. But by routing the money instead to Chakrabarti’s company — which his lawyer says was founded to be a “one-stop” campaign vendor — they were able to label it as a “strategic consulting” expense and fulfill the FEC’s disclosure requirements. Chakrabarti’s company could then spend the money as it wanted without being obligated to report where it went.
SO WHAT’S THE CONCERN?
Campaign finance reformers — including Ocasio-Cortez — bemoan a lack of transparency in how political money is raised and spent. While the use of LLCs is not uncommon, reformers say there is good cause for concern.
For example, an operator of a so-called “scam PAC” could use an LLC to obscure paying themselves money that donors intended to be used for political activity.
Former FEC attorney Adav Noti said that much of the coverage of the complaint against Ocasio-Cortez and her advisers was overblown. But he added that it is “completely fair for people to raise questions about the way they structured this.”
“When you see this sort of spending pattern, it can be a warning,” said Noti, who now works for the non-partisan Campaign Legal Center.
HOW DOES AOC EXPLAIN IT?
David Mitrani, an attorney representing Ocasio-Cortez and the other various groups named in the complaint, said Chakrabarti did not form the LLC to obscure spending. Rather, Mitrani said tax and campaign finance law is vague and they formed the company out of concern that they may otherwise run afoul of the law.
“We were concerned about tax and campaign finance law exposure,” Mitrani said.
Noti said there could be a plausible explanation, but reiterated that it is reasonable for people to “demand that these folks explain why they spent hundreds of thousands of dollar from their PAC to buy services from their own company.”
It’s unclear what the FEC will do. They could launch an investigation or choose not to take action. A spokesman for the FEC confirmed that the agency had received the complaint, but declined further comment.
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