Federal election laws barred President Obama from writing a big check to help settle Hillary Clinton’s gaping campaign debt, but he and other Clinton allies found another way to help the Secretary of State pay most of the bills left over from her presidential campaign.
Obama’s inaugural committee and a slew of other groups ranging from Bill Clinton’s charitable foundation to Media Matters to the Democratic gubernatorial campaigns of Gavin Newsom in California and Terry McAuliffe in Virginia combined to pay nearly $2.1 million in the first three months of the year to rent the list of supporters’ email addresses Clinton assembled during her unsuccessful campaign for the Democratic presidential nomination.
Clinton's presidential campaign received an additional $2.6 million from her still-functioning Senate campaign – which a source close to the campaigns said was to buy the presidential email list outright.
The more than $3.6 million she received for the list, revealed in Federal Election Commission filings, is about four times the $938,000 donors gave.
To be sure, email lists are valuable fundraising tools, and it’s become standard practice for campaigns to rent or buy them from one another.
But the money came at an especially opportune time for Clinton, whose ability to raise money to repay her debts is limited by ethics rules and traditions that effectively bar diplomats from partisan political activity, including raising cash.
The income from the list's rental and sale – the latter cryptically listed in her FEC filings as “sale of assets” – allowed Clinton's presidential campaign in the first three months of the year to pay $3.7 million in leftover bills that were threatening to become an embarrassment to the Obama administration.
Longtime Clinton friend James Carville, for instance, raised eyebrows recently when he sent an email to Clinton’s list offering to raffle off tickets to the American Idol season finale or a day with former President Bill Clinton in exchange for donations to retire Hillary Clinton’s debt, then jokingly said he would “be all for” Clinton appearing in a risqué promotional advertising campaign in exchange for $1 million to pay off the debt, which still stood at $2.3 million at the end of last month.
By contrast, the list rental is a discreet, behind-the-scenes transaction.
But it has to be done carefully or it risks running afoul of federal election rules, said Larry Norton, a former FEC general counsel.
“It has to be for fair market value,” Norton said. “The FEC has looked at this issue over and over again because of questions about whether (the rentals) were really arm’s length, fair-market-value exchanges or whether they were a way of providing an excessive contribution” that would violate the law capping contributions to 2008 campaigns at $2,300.
The biggest list rental fee was paid by Clinton’s own leadership political action committee, HillPAC, which paid $822,000 to her presidential campaign in the days after she was sworn in as the nation’s top diplomat.
The Democratic Congressional Campaign Committee, the William J. Clinton Foundation and the Presidential Inaugural Committee, a non-profit that raised $53 million for Obama’s inaugural festivities, each paid $274,000 to use Clinton’s email list to raise cash in the first three months of the year.
Media Matters for America, a left-leaning media watchdog that assailed journalists it deemed to have slighted Clinton during the campaign, paid $35,000 so far this year to rent the list, and $163,000 in rental fees last year.
WomenCount and EMILY’s List, political groups that support female candidates, paid a total of $153,000 to rent the list, while the gubernatorial campaign of longtime friend McAuliffe dropped $25,000 to email Clinton’s list. The Democratic Governors Association, and the campaigns of Sens. Blanche Lincoln (D-Ark.) and Kirsten Gillibrand (D-N.Y.), New York congressional candidate Scott Murphy and California gubernatorial candidate Newsom spent a combined $79,000.
The source close to the Clinton political operation said the campaign determined the rental fees by contacting commercial list brokers who determined the list's fair market value to various clients depending on usage.
The typical valuation is about 10 to 12 cents per email address, according to campaign finance lawyer Jason Torchinsky, who worked for the presidential campaigns of Rudy Giuliani in 2008 and George Bush in 2004.
Though it’s unclear exactly how many emails are on Clinton’s list, the rental fees look fairly standard, said Torchinsky, explaining that a campaign can derive lasting benefit from a well-planned rental.
“Typically, you allow the renter to use your donor list one time to mail people a solicitation under your name, and then - anybody who makes a donation to them – they can keep the names and information on their house list,” he said.
And he said Obama’s rental could have brought a couple additional benefits other than cash for his inauguration.
“One – it could help Clinton pay off her debt before she becomes his Secretary of State, and two – it could help him reconcile with her supporters,” he said. When Obama emails them, Torchinsky said “he is extending an open hand to them, including the ones who didn’t support him in the primary.”