Fundraising Wrinkle Exposed in Dems’ White House Race

(CN) — In the Democratic race to the White House, a fraction of a single percentage point has cast a heavy shadow.

For Sen. Bernie Sanders, the proverbial 1 percent has been a rallying cry against the influence the nation's richest have upon the U.S. government.

According to a new Politico investigation, that statistic represents something else entirely for front-runner Hillary Clinton: a campaign-finance arrangement that has sparked "money laundering" allegations.

Clinton boasted throughout her campaign about helping out "down-ballot" candidates through a joint-fundraising agreement that pads the coffers of the Democratic National Committee and state parties.

On April 18, the Sanders campaign's lawyer Brad Deutsch accused Hillary Victory Fund, the fundraising vehicle in this effort, of "serious apparent violations" to help Clinton's campaign avoid the $2,700 individual contribution limit.

Clinton's campaign manager Robby Mook portrayed the letter at the time as "irresponsible and misleading attacks" from a flailing rival, but Politico's analysis of Federal Elections Committee records went even farther than the original allegations.

Following a complicated money trial, Politico estimated that less than 1 percent of the $26 million raised by the Hillary Victory Fund supported state parties, and the article quoted anonymous state party operatives who complained that they were "essentially acting as money laundering conduits for [the DNC and Clinton's campaign]."

Sanders campaign spokesman Jeff Weaver pounced on the revelations in a statement accusing Clinton of "looting funds meant for the state parties to skirt fundraising limits on her presidential campaign."

"We think the Clinton campaign should let the state parties keep their fair share of the cash," Weaver said.

Last month, Weaver sent a fundraising letter lampooning a Clinton fundraiser that charged $353,400 for a chance to sit next to actor George Clooney as a heist right out of Clooney's film "Oceans 11." Even Clooney conceded in an interview with "Meet the Press" that the price tag was an "obscene amount of money."

Skewering Clinton's "high-dollar donors like Alice Walton of Wal-Mart fame and the actor George Clooney and his super-rich Hollywood friends," Weaver asked: "If Secretary Clinton can't raise the funds needed to run in a competitive primary without resorting to laundering, how will she compete against Donald Trump in a general election?"

Clooney, for his part, insisted that the proceeds of his fundraiser did not benefit Clinton directly, but instead went to "down-ticket" candidates.

But FEC filings showed funds transferred to state parties often went right back to the DNC on the same day, Politico reported.

Attorney Larry Noble, the general counsel for the Campaign Legal Center, a nonpartisan watchdog, said in a phone interview that the FEC should — but probably wouldn't — investigate the matter.

"I think it violates the spirit of the joint-fundraising rules," he said.

Whether the Clinton campaign also broke the letter of the law depends upon how much control it exercised over the committee's funds, Noble added.

One state party operative anonymously quoted in the Politico expose claimed that his fellow officials "weren't notified of the transfers into and out of their accounts until after the fact."

Calling the arrangement "very problematic," Noble said that the article raises "a very interesting question as to whether it violates the law."

The FEC's press officer Judith Ingram said in an email that the commission "cannot comment on specific matters" in the event of a complaint.

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