A political consulting firm set up by an aide of Rep. Alexandria Ocasio-Cortez, D-N.Y., was paid more than $1 million between 2016 and 2017 by two PACs he co-founded.
Brand New Congress PAC, launched by Ocasio-Cortez’s chief of staff Saikat Chakrabarti in 2016, spent more than 90 percent of its funds paying a firm owned by the PAC founder for “strategic consulting” in its first year and continued to pay the firm a big portion of its funds. Justice Democrats, another PAC launched by Chakrabarti in 2017, also spent a significant portion of its money paying Brand New Congress LLC.
Critics and conservative groups allege the arrangement, in which a big portion of the money raised by the PAC went to the vendor run by Chakrabarti himself, lacked transparency and was potentially set up to enable Chakrabarti to profit from the arrangement.
Conservative watchdog group National Legal and Policy Center on Monday filed a complaint to the Federal Election Commission alleging Chakrabarti's LLC raised the issue of transparency with the way it masked its subvendors by lumping together the PAC's expenditures as generic "strategic consulting" payments to the firm.
They also alleged that it served as a "cutout" for money raised from the Ocasio-Cortez's campaign and the two PACs.
David Mitrani, an attorney for the Ocasio-Cortez's campaign, the two PACs, and the company told ABC News in a statement that all of the entities have "fully complied with the law and the highest ethical standards."
He called described the company as a "legitimate campaign vendor" that provided services to candidates and committees and that the "implications in recent press accounts that these entities in any way operated with less than full transparency or in some way to skirt to law, are absolutely and unequivocally false."
Mirati also said in the statement that Chakrabarti, the sole member of the firm, did not take any salary from the firm nor did he earn any other income from the entity.
In a blog post by National Legal and Policy Center Chairman Peter Flaherty regarding the complaint, he highlighted Ocasio-Cortez's history of advocacy against "so-called dark money" and in favor of transparency in money in politics, suggesting hypocrisy when it came to the actions of her top aide.
Former Federal Election Commission lawyer Adav Noti said such an arrangement does mirror a practice used by "scam PACs" and raises a "warning flag," but he said there’s no evidence to support a kickback allegation in this case.
“When they disclosed a large chunk of the PACs spending through one LLC just as strategic consulting, that is a legitimate warning flag,“ said Noti, who is now with the Washington-based nonprofit Campaign Legal Center. “It’s uncommon, but so far there’s nothing necessarily unlawful. This is a completely overheated speculation."
According to Mirati's statement, Brand New Congress LLC was launched along with the PAC as part of an effort to elect progressive non-career politician candidates to Congress. The company, then called Brand New Campaign LLC, was set up to provide all-in-one campaign services to candidates without political background.
A PAC with the same name, Brand New Congress PAC was set up at the same time as a fundraising base for the operation, with the stated mission of electing “regular working people to Congress….to make government more accountable and responsive to the needs of all Americans.” Chakrabarti later launched another PAC Justice Democrats to support the effort, which more explicitly focuses on Democratic Party candidates.