Election watchdog charges Clinton campaign filed 'false' reports on Trump dossier funding

Michael Isikoff
Chief Investigative Correspondent
Hillary Clinton and Christopher Steele. with text from the Federal Election Commission complaint. (Photo illustration: Yahoo News; photos: Matt Rourke/AP, Victoria Jones/PA via AP)

An independent campaign watchdog group Wednesday filed a complaint with the Federal Election Commission charging that Hillary Clinton’s campaign and the Democratic National Committee filed “false” campaign disclosure reports that concealed payments to the private investigative firm that commissioned the controversial “dossier” on then candidate Donald Trump’s alleged ties to Russia.

The complaint by the Campaign Legal Center — a nonpartisan group with no ties to any political party — came shortly after President Trump, in an impromptu press conference on the White House lawn, called it a “disgrace” that Clinton’s campaign and the DNC paid for what he termed the “fake” dossier. He claimed the disclosure has “turned around” the multiple, ongoing investigations into possible links between his campaign and Moscow.

“So they made up the whole Russia hoax,” said Trump when asked about the disclosure about the Clinton campaign’s involvement in the dossier, which was first reported by the Washington Post. “Now … the hoax has turned around.”

The nine-page complaint by the campaign watchdog group says nothing about the veracity of the allegations in the dossier, a subject that is still being investigated by special counsel Robert Mueller and three congressional committees.

Instead, it focuses on how the dossier was paid for — through a prominent law firm, Perkins Coie, which hired the private investigative firm, Fusion GPS — and the failure of either the Clinton campaign or the DNC to report the actual purpose of these payments on their legally mandated campaign expenditure reports.

“The DNC and Hillary for America reported dozens of payments totaling millions of dollars to the law firm Perkins Cole with the purpose described as ‘Legal Services’ or ‘Legal and Compliance Consulting,’ when, in reality, at least some of those payments were earmarked for the firm Fusion GPS, with the purpose of conducting opposition research on Donald Trump,” the complaint by the Campaign Legal Center states. The complaint notes that the Clinton campaign made 37 payments to Perkins Cole totaling $5.6 million, and the DNC made 345 payments totaling $6.7 million.


“By failing to file accurate reports, the DNC and Hillary for America undermined the vital public information role that reporting is intended to serve,” the complaint states.

In particular, the complaint cites FEC policy guidance that states that entries for the purpose of a campaign disbursement “must be sufficiently specific to make the purpose of the disbursement clear” and that, “as a rule of thumb, filers should consider the following question: ‘Could a person not associated with the committee easily discern why the disbursement was made when reading the name of the recipient and the purpose?’”

“This guts the reporting requirements of the FEC,” said Lawrence Noble, a former general counsel of the FEC who now serves as the top lawyer for the Campaign Legal Center, about how the payments for the dossier were reported.

A spokesperson for the Hillary for America campaign and the DNC did not immediately respond to a request for comment. Graham M. Wilson, a partner at Perkins Cole, said in response: “Hillary for America and the DNC complied with all campaign finance laws, including their obligations to appropriately report and describe the purpose of all of their expenditures. This research work was to support the provision of legal services, and payments made by vendors to subvendors are not required to be disclosed in circumstances like this. This complaint fails to even note the Federal Election Commission’s affirmation in 2013 of the relevant rule, notes no authority to the contrary, and is patently baseless.”

Campaign legal experts and consultants say it is not at all uncommon for candidates of both parties to conceal expenditures for opposition research by paying for it through law firms or outside consultants. “It’s a black hole,” said one Democratic opposition research specialist, who asked not to be identified, and whose work for campaigns has rarely been publicly disclosed.

Moreover, there is ample precedent — approved by the FEC — for such arrangements. Ever since Walter Mondale’s campaign for president in 1984, the FEC has permitted campaigns to report lump sum payments to campaign consultants, law firms and other vendors without identifying subcontractors or subvendors they may have hired, so long as the payments were for the same general purpose listed for the overall disbursement in the first place.

But Noble said the FEC has become far too lax in enforcing its own rules demanding the accuracy of campaign expenditure reports — and the case of the dossier, due to its prominence and its impact on Trump’s White House, may have taken matters to a whole new level and could cause the commission (which rarely takes enforcement actions these days) to revisit the issue.

Most opposition research consists of culling through publicly available data bases and news clips, highlighting inconsistencies in a rival candidates’ position or publicly reported indiscretions in their past. Fusion GPS, a firm founded by two well-respected former Wall Street Journal reporters, went well beyond that. It was originally commissioned to research Trump’s business background by someone acting on behalf of a Republican primary opponent of Trump’s. In March of last year, as Trump emerged as the clear frontrunner for the nomination, the firm approached Marc Elias, a senior partner at Perkins Cole who represented the Clinton campaign and the DNC. Fusion “expressed interest in an engagement with the Firm … to continue research regarding” Trump, according to a letter sent by the managing partner of Perkins Cole to a lawyer for Fusion GPS on Monday, as the firm was battling a House Intelligence Committee subpoena for disclosure of its clients.

Candidate Donald Trump speaks during a campaign town hall in Janesville, Wis., in March 2016. (Digitally enhanced: Yahoo News; photo: Jabin Botsford/Washington Post via Getty Images)

Elias — after consulting with senior officials at the Clinton campaign and the DNC — approved the retention. At some point that spring, Fusion GPS retained a former British intelligence officer, Christopher Steele. Steele paid for information from Russian sources who reported allegations of collusion between the Trump campaign and the Putin government. His reports on these allegations — which he has since described as “raw intelligence” — formed the basis for the dossier.

But how much senior officials at the Clinton campaign and the DNC were informed about the work being done by Fusion GPS and the contents of the dossier is unclear. Donna Brazile, who became the DNC chair after Fusion GPS was hired but served most of the time the dossier was being assembled and while some of its contents shared with journalists, told Yahoo News Wednesday that at one point she requested the names of every consultant working for the committee — and she was never told by Perkins Coie about the work being done by Fusion GPS. “I knew nothing about it,” she said. (The Clinton campaign did not respond to inquiries about the matter Wednesday. A lawyer for Fusion GPS declined comment. )

“The clients were aware and approved the retention of outside research firms,” said a lawyer representing Perkins Cole who asked not to be identified. “They did not know which research firms had been engaged. … There was no reason to tell them.” The lawyer added that the material being investigated was “sensitive” and “you don’t want hundreds of people working on the campaign to be in the loop on it.”

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