Late on Friday, Saikat Chakrabarti suddenly resigned as Alexandria Ocasio-Cortez’ chief of staff, just a week after the frosh representative’s tete-a-tete with Nancy Pelosi. Chakrabarti’s immediate departure appeared to be a direct result of that meeting, but developments over the weekend raise a new possibility. The New York Post reported that federal investigators have taken a keen interest in Chakrabarti, and especially how he moved campaign contributions around:
The Feds are looking into possible campaign finance misdeeds by Rep. Alexandria Ocasio-Cortez’s chief of staff and lead rainmaker, who suddenly resigned Friday, federal sources told The Post.
The inquiry centers on two political action committees founded by Saikat Chakrabarti, the top aide who quit along with Ocasio-Cortez spokesman Corbin Trent,the sources said. Trent left to join the congresswoman’s 2020 re-election campaign. …
The two PACs being probed, Brand New Congress and Justice Democrats, were both set up by Chakrabarti to support progressive candidates across the country.
But they funneled more than $1 million in political donations into two private companies that Chakrabarti also incorporated and controlled, according to Federal Election Commission filings and a complaint filed in March with the regulatory agency.
Why set up parallel organizations with almost identical names? Private companies aren’t governed by campaign-finance laws, which means Chakrabarti could do whatever he wanted with the cash. By just sticking “LLC” in front of the PAC names for the title of the private companies, it could appear that the money was just being moved around different parts of the same organization. If these allegations are true in Chakrabarti’s case, it has the irony of demonstrating that the Democratic Socialists are a little more interested in profit than they profess — even if the arrangements turn out to be entirely legal.
The suspicions are not new. The FEC got its first complaint about this in March, at which point everyone involved insisted that they complied with the law:
Rep. Alexandria Ocasio-Cortez (D-N.Y.)’s chief of staff helped establish two political action committees that paid a company he ran more than $1 million in 2016 and 2017, federal campaign finance records show. …
The arrangement, first reported by conservative outlets, left hidden who ultimately profited from the payments — a sharp juxtaposition with Ocasio-Cortez’s calls for transparency in politics. She has called dark money “the enemy to democracy.”
The money that flowed to her chief of staff’s company have subjected the first-term congresswoman to critics’ charges of hypocrisy. On Monday, a conservative group filed a complaint with the Federal Election Commission alleging that the PACs failed to properly disclose their spending.
David Mitrani, attorney for the PACs, the LLC and Ocasio-Cortez’s campaign, said in a statement Tuesday that all four entities “fully complied with the law and the highest ethical standards.”
If federal investigators have taken an interest in this now, it might mean that they didn’t find Mitrani’s denials very persuasive. Back in March, the Washington Post noted that no one had shown yet that Chakrabarti had profited from paying his own companies with AOC PAC monies, although one would have to wonder how he wouldn’t. The Washington Post wondered about that denial at the time:
“In a normal situation, if all you saw was a PAC that disbursed hundreds of thousands of dollars to an affiliated entity to pay the salaries of people who were really working for the PAC, that looks like . . . a PAC that takes in money to engage in political activity but is actually enriching its owners,” said Adav Noti, former Federal Election Commission lawyer who is now chief of staff of the Campaign Legal Center, a group that advocates for greater transparency in campaign finance.
If that was the case, though, it would show up in Chakrabarti’s financial disclosures. Senior staffers are required to file those along with the elected officials they serve — unless those elected officials provide them a very big loophole to keep their finances hidden. And voila!
Although Ocasio-Cortez raised the salaries of junior staffers in her office to just over $52,000 a year, Chakrabarti took a massive pay cut. The Harvard graduate and tech millionaire agreed to an annual salary of $80,000 — far less than the $146,830 average pay for his position.
Because his salary was less than $126,000, congressional rules exempted the chief of staff from having to disclose his outside income.
If federal investigators have grown curious about Chakrabarti’s money transfers, they’ll be positively nosy about the appearance of a conspiracy to keep them under wraps. A federal probe over these matters would explain why Chakrabarti left his office immediately, and why Ocasio-Cortez was a no-show at a campaign event over the weekend. It certainly explains it better than a scolding from Nancy Pelosi.
Stay tuned, and keep popping the popcorn.
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