By Pam Martens and Russ Martens: November 6, 2017
Secret side agreements are a common maneuver by corporate law firms. Here’s how they work. An agreement that is legal and passes the smell test is drafted and submitted to a court or a regulatory body for public consumption. Then, a separate, secret side agreement is written and signed by both sides and it contains all of the smelly, shady, ethically questionable hard details on how the original agreement will be carried out.
Donna Brazile, the former interim Chair of the Democratic National Committee (DNC) during the 2016 presidential campaign, has written a new book, “Hacks: The Inside Story of the Break-ins and Breakdowns that Put Donald Trump in the White House,” and has revealed the secret side agreement that the DNC had with Hillary Clinton’s campaign.
In 2015, Hillary Clinton’s campaign set up a joint fundraising committee called the Hillary Victory Fund (HVF) with the DNC and over 30 state democratic committees. The public portion of the agreement indicated that Hillary would raise funds for her own campaign while also allocating a portion to the DNC to help the overall Democratic Party as well as allocating funds to state democratic committees in order to support down-ballot candidates in their local elections. But the secret side agreement that effectively privatized the DNC, giving Hillary and her campaign lawyers control of the DNC and its money, had yet to see the light of day.
This is how Brazile describes the secret side agreement in her book:
“The agreement—signed by Amy Dacey, the former CEO of the DNC, and Robby Mook [Clinton’s campaign manager] with a copy to Marc Elias [lawyer at Perkins Coie] — specified that in exchange for raising money and investing in the DNC, Hillary would control the party’s finances, strategy, and all the money raised. Her campaign had the right of refusal of who would be the party communications director, and it would make final decisions on all the other staff. The DNC also was required to consult with the campaign about all other staffing, budgeting, data, analytics, and mailings.”
The Clinton camp has now attempted to defend itself by saying these terms are standard because they were not going to kick in until the Democratic Party had chosen its official presidential nominee at its party convention in July 2016. But that’s not what the actual secret side agreement says. It indicates the following: “Beginning October 1, 2015,” the HVF would begin transferring $1.2 million to the DNC at the start of each month with that release “conditioned on” Hillary Clinton’s primary campaign personnel being consulted “and have joint authority over strategic decisions over the staffing, budget, expenditures, and general election related communications, data, technology, analytics, and research. The DNC will provide HFA advance opportunity to review on-line or mass email, communications that features a particular Democratic primary candidate.”
Additionally, the secret agreement states that “the DNC agrees that no later than September 11, 2015 it will hire one of two candidates previously identified as acceptable to HFA” (Hillary for America, the primary campaign fund for Clinton) as its Communications Director. All of this is occurring in the fall of 2015 with the official Democratic nominating convention not taking place until July 2016.
As Politico reported in May 2016, the Hillary Victory Fund was a sham in multiple other ways. First, Politico writes that less than 1 percent of the money raised stayed in the state’s coffers. The Treasurer of the Hillary Victory Fund actually had the power to move money in and out of state committee bank accounts. Politico reporters Ken Vogel and Isaac Arnsdorf cite the following example to show how things actually worked:
“…the Minnesota Democratic-Farmer-Labor Party received $43,500 from the victory fund on Nov. 2, only to transfer the same amount to the DNC that same day. The pattern repeated itself after the Minnesota party received transfers from the victory fund of $20,600 on Dec. 1 (the party sent the same amount to the DNC the next day) and $150,000 on Jan. 4 (it transferred the same amount to the DNC that day).
“That means that Minnesota’s net gain from its participation in the victory fund was precisely $0 through the end of March. Meanwhile, the DNC pocketed an extra $214,100 in cash routed through Minnesota — much of which the DNC wouldn’t have been able to accept directly, since it came from donors who had mostly had already maxed out to the national party committee.
“A similar pattern transpired with most of the participating state parties. As of March 31, only eight state parties (most of which were in battleground states such as Colorado, Florida, Nevada, New Hampshire and Virginia) had received more from the victory fund than was transferred from their accounts to the DNC.”
Brazile backs up this account in her book, writing that “the states kept less than half of 1 percent of the $82 million they had amassed from the extravagant fund-raisers Hillary’s campaign was holding….”
Brazile notes in her book that the lawyer, Marc Elias, of the politically-connected law firm, Perkins Coie, was copied on the secret side agreement. Elias has repeatedly come under scrutiny for his multi-faceted roles in the 2015-2016 presidential campaign. Most recently, he was exposed as the guy behind the hiring of Fusion GPS which compiled the scandalous Russian dossier on Donald Trump, using both Hillary campaign funds and DNC funds. The Washington Post reported that Elias was allowed to spend these funds “without oversight by campaign officials, according to a spokesperson for his law firm.”
Elias served as the General Counsel to Hillary’s primary campaign committee, Hillary for America, as well as serving as one of a team of lawyers from Perkins Coie that provided legal advice to the DNC. (Elias also provided legal advice to the Democratic Senatorial Campaign Committee, Democratic Congressional Campaign Committee, and Democratic Governors Associations, according to the Perkins Coie web site last year.)
As a legal adviser to the DNC, Elias should have known that its charter mandated fairness and impartiality to all primary candidates. But when WikiLeaks released emails last year that had been hacked at the DNC, Marc Elias was caught giving advice on how to tar Senator Bernie Sanders after his campaign suggested that the Hillary Victory Fund was skirting Federal election law. The email from Elias read:
“My suggestion is that the DNC put out a statement saying that the accusations the Sanders campaign are not true. The fact that CNN notes that you aren’t getting between the two campaigns is the problem. Here, Sanders is attacking the DNC and its current practice, its past practice with the POTUS and with Sec Kerry. Just as the RNC pushes back directly on Trump over ‘rigged system’, the DNC should push back DIRECTLY at Sanders and say that what he is saying is false and harmful the [sic] the Democratic party.”
Writing for Politico in 2014, Ken Vogel detailed how Elias and Perkins Coie have not only been the legal go-to guys for the Democratic party over the years but how they have also tinkered with Federal election law to shift more power to the 1 percent. Vogel writes:
“Perkins Coie’s political law practice, anchored by Elias and former White House Counsel Bob Bauer, has something of a stranglehold on the Democratic Party’s election law business, representing not only the party committees themselves but everyone from [Harry] Reid (whose various committees have paid $317,000 in legal fees to Perkins Coie over the years) to Obama ($7.4 million) to the major Democratic super PACs ($19 million).”
The thrust of the article, however, is that Elias played a central role in further opening the spigots for legal revenues his firm might be expected to collect in the future by tinkering with Federal legislation at the eleventh hour. Vogel writes:
“A powerful Democratic lawyer helped craft a provision that was slipped into a year-end spending bill allowing political parties to raise huge new pools of cash — including some for legal fees that are likely going to be collected by his own firm…
“The change has the potential to halt or at least slow the erosion of power of the political parties, since it would increase the maximum amount of cash that rich donors may give to the national Democratic and Republican party committees each year from $97,400 to $777,600 or more.”
The question that no one seems to be asking is who are the main beneficiaries of Perkins Coie’s heavy influence at the top of the Democratic Party. Despite Obama’s re-election for a second term, the Democratic Party shed nearly 1,000 seats from coast to coast. The Republicans now control both houses of Congress and the Executive Branch. A man with the lowest approval rating in modern history now occupies the Oval Office.
The primary beneficiaries of this hubris have been the 1 percent – Wall Street and hedge fund titans – and giant multi-national corporations that dominate the client roster at Perkins Coie.
Those within the Clinton camp and DNC who are suggesting to the American people that there is nothing to see here, time to move along, are dead wrong. Just because the Republican presidential campaign may have been corrupted by outside forces doesn’t mean that the Democratic campaign wasn’t also corrupted by its own outside forces. It’s time to follow the obscene political money trail wherever it leads.