Behind the scenes at the Democratic National Committees summer meeting in Minneapolis last August, campaign officials for Hillary Clinton were making a hard sell to the state parties.
In private huddles, they urged state officials to sign on to an ambitious fundraising endeavor that would allow Clintons presidential bid, the DNC and the state parties to scoop up and share big checks from wealthy donors. It would mark the earliest creation of a joint fundraising committee between a presidential candidate and the party, and it would be the biggest ever, thanks to a 2014 U.S. Supreme Court decision that knocked down a cap on how much donors could give to federal campaigns in a single year.
A record 32 state parties signed on to the fund, allowing the committee to solicit donations 130 times greater than what a supporter can give to Clintons campaign for the primary.
But the states have yet to see a financial windfall. Meanwhile, Clintons campaign has been a major beneficiary, getting an infusion of low-dollar contributions through the committee at a time when rival Bernie Sanderss army of small donors is helping him close in on her financially. The fund is run by Clinton campaign staff, and its treasurer is Clintons chief operating officer.
Clinton officials said their use of the fund is proper and that the state parties will benefit from the millions of dollars the joint fundraising committee is generating for the DNC, which provides the infrastructure to support Democratic campaigns across the country.
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The early, expansive use of a jumbo-size joint fundraising committee shows how the Clinton campaign has worked to maximize donations from wealthy supporters, seizing on rules loosened by the Supreme Court.
Many states were wary of joining the effort, worried that such a partnership would be perceived as an endorsement of Clinton and might interfere with their efforts to raise money from home state donors. But campaign officials including Marlon Marshall, Clintons director of state campaigns emphasized that this was a way to strengthen the party at its roots, a message Clinton echoed in the speech she delivered at the Minneapolis meeting to DNC members.
Its time to rebuild our party from the ground up, the former secretary of state pledged. When our state parties are strong, we win.
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So far, the state parties have served only as a pass-through for their share of the funds. Campaign finance records show that nearly $2 million in donations to the fund initially routed last year to individual state party accounts was immediately transferred to the DNC, which is laboring to pay off millions of dollars in debt.
Even as it has bolstered the DNC, the Hillary Victory Fund has had striking success bringing in new donors to support Clintons fight to beat Sanders for the Democratic nomination. The committee spent more than $4 million prospecting for small-dollar contributors through direct mail and online ads that resemble official campaign material, down to the signature Im with her tagline. The net proceeds raised for the campaign: $3.24 million through the end of 2015.
Several campaign finance attorneys said the funds early investments in small-donor recruitment for Clinton were unusual, noting that a joint fundraising committees resources are traditionally focused on boosting a party nominee, typically through events at upscale hotels for deep-pocketed contributors.
went to two Washington, D.C.-area vendors that also work for the Clinton campaign: Bully Pulpit Interactive, which received $1.9 million for online ads, and Chapman Cubine Adams +Hussey, which was paid $2.4 million for direct mail solicitations, Federal Election Commission records show.
The victory fund also sponsors Clintons online store, allowing donors who have already given the maximum to her campaign to purchase Hillary lapel pins, caps or car magnets, with their money benefiting the party. Its similar to the way President Obamas online shop was run in his 2012 reelection.Aides to Sanders, whose joint fundraising committee with the DNC has not yet been active, said the Hillary Victory Fund appears to be functioning as an arm of Clintons campaign.
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The amount donors can contribute to joint fundraising committees is much larger than in the past, thanks to the Supreme Courts 2014 decision in McCutcheon v. FEC, which did away with the annual limit an individual could give to federal candidates and party committees.
[Supreme Court ruling gives small number of wealthy donors new ways to drive campaigns]
The change in the law increases the incentive for parties and candidates to create super-sized committees. For every state party that joined the Hillary Victory Fund, officials were able to increase the maximum annual donation from an individual by $10,000.
At the August DNC meeting, Clinton aides lobbied states to get on board.
A few state parties were pretty suspicious of this, because there was no way you could see it as anything but a tacit endorsement of Hillary Clinton, said one party leader whose state declined to sign on to the victory fund and spoke on the condition of anonymity to describe private conversations.
Other state officials were concerned that the fund would undercut their ability to raise funds for key races from home-state contributors.
We felt it was in the best interest of Nebraska Democrats to not participate, said Vince Powers, the state party chairman there, who said his priority is the reelection of Brad Ashford, the lone Democrat in the states congressional delegation.They raised all that money, so transferring it back out just seemed like the fair thing to do, she said. We felt it would help them and also help our efforts in Utah to mobilize voters. The treasurer of the Hillary Victory Fund is Elizabeth Jones, the Clinton campaigns chief operating officer. She controls how the money is transferred to the states and the DNC, according to a person familiar with the structure. The timing of the transfers is at her sole discretion, according to a copy of the joint fundraising agreement obtained by The Washington Post.
In Minneapolis, the Clinton campaign tried to persuade Powers to come on board, inviting him to meet privately with Marshall, Clintons director of state campaigns and political engagement. It was a nice meeting, said Powers, though he didnt change his position.
In the end, states including California, Iowa and Washington declined to sign on. Among the 32 that did was Utah. The state partys executive director, Lauren Littlefield, said it was clear that the donations the state parties received through the victory fund were expected to be routed to DNC headquarters in Washington.
The victory fund now functions as an operation embedded within the Clinton campaign, run by campaign staffers. Last year, the fund reimbursed the campaign nearly $1.5 million for salary and overheard.
(In comparison, the treasurer of the Bernie Victory Fund, Sanderss joint fundraising committee with the party, is the DNCs chief financial officer, Bradley Marshall. So far, the fund has raised just $1,000 a donation from the DNC.)
Several state party officials participating in the effort particularly those in battleground states said theyre confident they will eventually reap the benefits.
When somebody comes to me and says, Hey, I have a way of making your party stronger, I say, Lets do it,  said Raymond Buckley, chairman of the New Hampshire Democratic Party, who said he expects the DNC will make enormous investments in his state before the November elections.