Political operation tied to Alexandria Ocasio-Cortez aide faces scrutiny

Washington (CNN)A political operation tied to New York Rep. Alexandria Ocasio-Cortez's chief of staff is facing scrutiny over payments made to a company he owned.

Saikat Chakrabarti's corporation, Brand New Congress LLC, received $867,000 in 2017 from two political action committees he helped found, Brand New Congress PAC and Justice Democrats, Federal Election Commission records show. Ocasio-Cortez's campaign also paid Chakrabarti's corporation more than $18,000 in 2017 for "strategic consulting."
Chakrabarti, a former tech executive, went on to serve as Ocasio-Cortez's co-campaign manager the following year and now runs her congressional office.
This week, a conservative group, the National Legal and Policy Center, filed a complaint asking the Federal Election Commission to audit and investigate the political committees. The group argues the committees skirted campaign-finance laws by paying the large sums for "strategic consulting" services to Chakrabarti's corporation without disclosing details on precisely how the money was spent and who ultimately benefited from the spending.
    The complaint comes as the outspoken Ocasio-Cortez has become the face of the Democratic Party's liberal wing and a top target for conservatives. The freshman lawmaker has routinely criticized the role of undisclosed money in politics.
    Ocasio-Cortez, Chakrabarti and the lawyer representing the political committees deny wrongdoing.
    "There is no violation," Ocasio-Cortez told Fox News on Tuesday.
    Federal rules require candidates and committees to disclose in filings with the Federal Election Commission how they spend donors' money. The complaint centers on federal regulations about how much detail candidates are required to disclose about vendor activities.
    Paul Ryan, a top lawyer for Common Cause and an advocate for greater transparency in politics, said the dispute over whether the committees needed to disclose information about who ultimately received payments from Chakrabarti's company "is rooted in weak disclosure requirements" at the FEC. Under the agency's rules, for instance, a political committee must provide memos listing all the vendors paid through a campaign credit card, but the agency has not required campaign vendors to detail their payments to other vendors in a similar fashion, he said.
    However, Ryan said the Federal Election Commission could balk at another aspect of the committees' reports: the broad category of "strategic consulting" that committees used to describe Brand New Congress LLC's work on their behalf. If the corporation undertook polling, fundraising and other campaign activities on behalf of candidates and committees, commissioners could conclude that they did not accurately describe those activities in their filings, he said.
    In its complaint, The National Legal and Policy Center argues the payments to Brand New Congress LLC offered evidence of an "extensive, off-the books operation."
    In a statement, David Mitrani, an attorney whose firm represents the PACs, Ocasio-Cortez's campaign and the LLC, said all four have operated "fully in compliance with the federal campaign-finance laws."
    He said the political committees did not disclose who ultimately received money from the LLC because Federal Election Commission staffers told the corporation that it did not have to provide those details. "If the PACs and campaigns were required to provide additional information on subvendor payments made by Brand New Congress LLC, it would have done so," Mitrani said.
    Federal Election Commission officials said this week that they were barred by agency rules from commenting on any matters pending before the commission.
    The political operation that Chakrabarti helped establish centered on a novel approach: using a new crop of political action committees to help recruit and train hundreds of progressives to run for Congress and make it easier for little-known candidates to mount campaigns.
    Ocasio-Cortez was the breakout star of that effort, toppling a veteran congressman, Joseph Crowley, in the Democratic primary before winning last November's general election.
    Brand New Congress formed in 2016, followed by Justice Democrats the following year. Brand New Congress LLC was created by Chakrabarti to serve as a " 'campaign in a box,' a one-stop vendor for communications, field, online organizing, fundraising and the like" for those candidates, Mitrani said in his statement.
    Mitrani said Chakrabarti "did not receive any compensation -- by way of salary, profit or otherwise" from the corporation.
    Chakrabarti said the groups made no secret of the plans. He discussed the strategy in a 2016 MSNBC interview, and the PACs posted explanations about the LLC's role on their websites.
    "We were transparent about it from the start," he said Tuesday on Twitter.
      Even so, Adav Noti, senior director of trial litigation at the nonpartisan Campaign Legal Center, said the committees could be exposed to potential violations over how they reported the spending to the Federal Election Commission.
      "They took in a pretty serious amount of money, and on their FEC reports, all they disclosed in terms of how they spent it was that they made a bunch of big payments to an affiliated LLC," said Noti, a former lawyer with the Federal Election Commission.