@hightor,
The Saturday morning after the convention in July, I called Gary Gensler, the chief financial officer of Hillary’s campaign. He wasted no words. He told me the Democratic Party was broke and $2 million in debt.
“What?” I screamed. “I am an officer of the party and they’ve been telling us everything is fine and they were raising money with no problems.”
That wasn’t true, he said. Officials from Hillary’s campaign had taken a look at the DNC’s books. Obama left the party $24 million in debt—$15 million in bank debt and more than $8 million owed to vendors after the 2012 campaign—and had been paying that off very slowly. Obama’s campaign was not scheduled to pay it off until 2016. Hillary for America (the campaign) and the Hillary Victory Fund (its joint fundraising vehicle with the DNC) had taken care of 80 percent of the remaining debt in 2016, about $10 million, and had placed the party on an allowance.
If I didn’t know about this, I assumed that none of the other officers knew about it, either. That was just Debbie’s way. In my experience she didn’t come to the officers of the DNC for advice and counsel. She seemed to make decisions on her own and let us know at the last minute what she had decided, as she had done when she told us about the hacking only minutes before the Washington Post broke the news.
The Friday Cover
On the phone Gary told me the DNC had needed a $2 million loan, which the campaign had arranged.
“No! That can’t be true!” I said. “The party cannot take out a loan without the unanimous agreement of all of the officers.”
“Gary, how did they do this without me knowing?” I asked. “I don’t know how Debbie relates to the officers,” Gary said. He described the party as fully under the control of Hillary’s campaign, which seemed to confirm the suspicions of the Bernie camp. The campaign had the DNC on life support, giving it money every month to meet its basic expenses, while the campaign was using the party as a fund-raising clearinghouse. Under FEC law, an individual can contribute a maximum of $2,700 directly to a presidential campaign. But the limits are much higher for contributions to state parties and a party’s national committee.
Individuals who had maxed out their $2,700 contribution limit to the campaign could write an additional check for $353,400 to the Hillary Victory Fund—that figure represented $10,000 to each of the 32 states’ parties who were part of the Victory Fund agreement—$320,000—and $33,400 to the DNC. The money would be deposited in the states first, and transferred to the DNC shortly after that. Money in the battleground states usually stayed in that state, but all the other states funneled that money directly to the DNC, which quickly transferred the money to Brooklyn.
“Wait,” I said. “That victory fund was supposed to be for whoever was the nominee, and the state party races. You’re telling me that Hillary has been controlling it since before she got the nomination?”
Gary said the campaign had to do it or the party would collapse.
“That was the deal that Robby struck with Debbie,” he explained, referring to campaign manager Robby Mook. “It was to sustain the DNC. We sent the party nearly $20 million from September until the convention, and more to prepare for the election.”
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