Federal campaign finance reports of the Kansas Democratic Party for the 2016 election cycle don't account for $900,000 of the $2.4 million transferred from Democratic nominee Hillary Clinton's fundraising operation to the state party before funneled to the Democratic National Committee.
Documents submitted to the Federal Elections Commission by the Hillary Victory Fund recorded 10 transactions from August to November 2016 that resulted in deposits of $2.46 million into accounts of the Kansas Democratic Party. State Democratic Party reports showed receipt of $1.56 million and recorded transfers of that amount to the DNC.
An attorney with a pro-Donald Trump organization challenging legality of the Clinton cash transfers to 32 state Democratic parties said the Victory Fund's reporting indicated $900,000 was shifted to the state party on Oct. 6, 2016. The state party didn't report receiving that amount nor transferring it to the DNC, yet the DNC acknowledged accepting $900,000 from the Kansas Democratic Party on Oct. 6, 2016.
Ethan Corson, executive director of the state Democratic Party, said he wasn't certain why the party's filing with the FEC didn't match accounting of the Hillary Victory Fund.
He said the state party would complete an audit of its finances during the 2016 election cycle and file amendments with the FEC if necessary.
"We've been trying to diligently go back," said Corson, the party's executive director since August. "We were in this process anyway when the Hillary Victory Fund came up."
The discrepancy emerged after the Committee to Defend the President, a super PAC supportive of President Trump, asked the FEC to determine whether the Clinton campaign improperly used the Hillary Victory Fund to raise money from large donors through collaboration with dozens of state Democratic Party organizations and the DNC.
Dan Backer, an attorney with the Committee to Defend the President, which was formerly called the Stop Hillary PAC, filed the FEC complaint in December 2017 alleging an "unprecedented, massive, nationwide multimillion-dollar conspiracy."
Backer alleged in an interview that 32 state Democratic parties didn't have meaningful custody of the money channeled through those state organizations by the Clinton Victory Fund. He asserted the state organizations served to paper the funds back to the DNC, where it was invested in the Clinton campaign. The tactic enabled wealthy donors to circumvent individual contribution limits in support of Clinton's campaign, Backer said.
"This is just wrong," Backer said. "It's an $84 million money laundering scandal."
He filed a lawsuit against the FEC in Washington, D.C., to compel the election agency to investigate Clinton's fundraising activities.
While Backer described as illegal the Clinton campaign's transactions with state party organizations and the DNC, he expressed no opinion about the Trump campaign doing business in the same manner but with fewer state parties than Clinton.
Backer played a key role in placing the McCutcheon v. FEC case before the U.S. Supreme Court. The case produced a 5-4 decision in 2014 holding that limits on contributions by an individual over a two-year period to a national party or federal candidate committee were unconstitutional. The decision expanded loopholes in campaign law and opened the door wider to layered fundraising operations by presidential candidates.
Corson said the Kansas Democratic Party and other state parties participated in the joint fundraising agreement with the Hillary Victory Fund "because it helped strengthen our state party apparatus, along with that of the Democratic National Committee."
In May, an official for the Maine Democratic Party offered Maine Public Radio a statement that used the exact same wording. FEC documents indicated the Hillary Victory Fund sent $3 million to the Maine Democratic Party.
"Such agreements are legally required under campaign finance law as a way to ensure transparency if any committees want to raise money jointly," Corson said.