Hillary Clinton's presidential campaign used a loophole in campaign finance law to acquire for free a valuable email list compiled by a group with which it couldn't legally coordinate, hacked emails reveal.
Months before the campaign officially launched, Clinton's chief of staff and her campaign's eventual chairman and manager were discussing ways to acquire the sizable email list compiled by Ready for Hillary, a Super PAC that laid the groundwork for Clinton's presidential run.
In emails to Clinton aides Cheryl Mills, Robby Mook, and John Podesta, an attorney for the nascent campaign laid out options for acquiring the list, which contained the email addresses of nearly four million Clinton supporters.
The campaign (or exploratory committee) could buy it directly from Ready for Hillary, an attorney explained, or it could exchange its own email list for Ready for Hillary's, as long as the two were of comparable fair market value and the Super PAC was considered an "ongoing entity."
However, by the time the exchange took place, Ready for Hillary was already planning to phase out. So the Clinton campaign went with a third option that involved yet another Super PAC.
"If [Ready for Hillary] transfers the lists to another ongoing entity that is registered as an independent expenditure only committee (SuperPAC), there is no contribution limit, so the ongoing SuperPAC would not have to pay for the list," explained campaign finance attorney Lynn Utrecht in a 2014 memo to Mills.
"It would be treated as an unlimited in-kind contribution from Ready for Hillary to another SuperPAC," she said.
The second Super PAC could then exchange the list with Clinton's campaign. "In this way, no payment from the candidate or exploratory committee would be required," Utrecht wrote.
Politico reported in May that that was the structure of the email list transfer, though it did not name the second Super PAC involved in the transaction. In her memo, Utrecht floated Priorities USA Action and Emily's List, both high-dollar Super PACs supportive of Clinton, as potential intermediaries.
The Clinton campaign did not respond to a request for additional information on the transaction.
Emails released by Wikileaks on Tuesday—which were stolen from Podesta's email account by hackers believed to be acting in concert with the Russian government—provide details on the internal deliberations that informed the Clinton campaign's strategy for obtaining the email list.
Those emails show that Mook, who would become Clinton's campaign manager after the campaign officially launched months later, worried that a Super PAC transfer might push the boundaries of election law and result in bad press for the candidate, who has made campaign finance reform a pillar of her candidacy.
"Big picture, I'm approaching this from the following position: does the benefit of a campaign getting the list outweigh the cost in dollars, compliance headaches, and scrutiny (actual FEC investigation or just handwringing in the press…especially early)," Mook wrote.
It would not just be the campaign but the third-party groups involved in the transfer that might suffer, Mook wrote. The result could significantly dent outside spending efforts on Clinton's behalf.
"Kicking off with annoying complaints about coordination could give Priorities a rocky start too. And hamper ability to be aggressive there…where big dollars are at stake," he wrote.
Just as Mook feared, news of the Ready for Hillary list transfer brought immediate legal challenges. The Foundation for Accountability and Civic Trust (FACT), an ethics watchdog group, filed a complaint with the Federal Election Commission alleging that it amounted to an illegal in-kind contribution to the Clinton campaign.
"Federal law explicitly prohibits a candidate from coordinating with and accepting donations, including an in-kind donation of a mailing list, from a Super PAC," said former US Attorney Matthew Whitaker, who leads FACT, in a statement on the complaint.
The key question was whether the goods exchanged for the Ready for Hillary list were comparable in value, but that is difficult to determine from public records, Campaign Legal Center counsel Larry Noble told the Washington Examiner at the time.
"I think we're going to run into an issue here because, as far as I know, the campaign hasn't identified the groups involved and until we know more about that, there are going to be a lot of serious questions raised," Noble explained.
"The concern is that the Clinton campaign is getting a list of tremendous value and paying little or nothing for it."
When Utrecht floated the third-party-transfer option, Mook suggested that simply paying for the list would be simpler and potentially a minimal financial commitment.
"And am I understanding your math correctly, that if they have 3.5 million names that it would likely cost in the neighborhood of $3,500 to purchase the entire list ($1 per 1000)?" he asked. "If so, that's a bargain."
He floated the idea of Ready for Hillary asking its email subscribers to opt-in to the Clinton campaign email list instead.
"I assume this would be both free and fully legal as long as it is never requested by the campaign or it's agents," he wrote.
It was not clear from the email exchange how Ready for Hillary might have pursued that option without direction from such campaign agents.