Nothing too sleazy for the Democrats.

Hillary Clinton campaign got illicit funds from D.C. scandal figure

Terry McAuliffe, now Va. governor, was Clinton campaign chairman at time

Despite Hillary Rodham Clinton’s promise that she had scrubbed illegal cash contributions from her 2008 presidential campaign, prosecutors revealed Monday that the mastermind of Mayor Vincent C. Gray’s “shadow campaign” also funneled hundreds of thousands of dollars to aid Mrs. Clinton’s bid for the White House.

Jeffrey E. Thompson’s scheme included diverting more than $608,000 in illicit funds to a New York marketing executive, Troy White, who organized “street teams” to raise Mrs. Clinton’s visibility in urban areas during her Democratic primary battle against Barack Obama. Mr. White pleaded guilty to a misdemeanor in the case.

Prosecutors said that from February to May 2008, Thompson used two firms to disburse $608,750 in “excessive and unreported contributions to pay for campaign services in coordination with and in support of a federal political candidate for president of the United States and the federal and the candidate’s authorized committee.” That candidate was Mrs. Clinton.

Mr. Obama, too, received thousands of dollars in campaign contributions from Thompson and his employees, although those donations apparently were legal.

U.S. Attorney Ron Machen said there was no indication that Mrs. Clinton was aware of the specific activities to aid her campaign.

“There are varying degrees of knowledge among the different candidates,” Mr. Machen said.

An attorney for Mrs. Clinton’s campaign in 2008, Lyn Utrecht, has said the campaign cooperated fully with prosecutors and never hired Mr. White to work on the presidential race. She said the campaign committee “turned down Mr. White’s services.”

But news reports last fall indicated that a top Clinton adviser, Minyon Moore, facilitated a meeting between Mr. White and Thompson. Ms. Utrecht did not return a request for comment Monday, nor did Mrs. Clinton’s top spokesman, Philippe Reines.

Mrs. Clinton’s campaign chairman at the time was Terry McAuliffe, now governor of Virginia. Mr. McAuliffe’s gubernatorial campaign said last year that it would not return a $2,500 donation that Thompson made in 2009.

The revelations are raising untimely, for Mrs. Clinton, reminders of fundraising improprieties just as her supporters are gearing up for a probable run for the presidency in 2016.

In 2007, when Mrs. Clinton was considered the front-runner for the Democratic nomination, she took the unprecedented step of returning $850,000 in contributions raised by Norman Hsu, a top campaign bundler who was wanted on criminal charges in a multimillion-dollar Ponzi scheme. At the time, Clinton campaign officials said they would undertake “vigorous” extra vetting procedures to make sure her sources of campaign funds were legitimate.

In 2009, a federal judge sentenced Hsu to more than 24 years in prison for violating campaign finance laws and defrauding investors.

The Hsu scandal, in turn, brought unwelcome reminders for Mrs. Clinton of her husband’s fundraising controversies in the 1990s, including Little Rock businessman Charlie Trie. In that episode, about $640,000 was returned or refused after accusations that Trie funneled fraudulent donations.

There was also the case of businessman Johnny Chung, in which the Democratic National Committee returned more than $360,000 in donations raised during President Clinton’s 1996 re-election bid. Chung admitted that he accepted some of the money from Chinese military officials.

In the Thompson case, prosecutors said Mr. Gray knew about the illegal shadow campaign. But Mr. Gray’s defenders are now using the example of Mrs. Clinton to bolster their argument that the mayor had no knowledge of Thompson’s illicit fundraising.

“No one has suggested that Hillary Clinton knew of Thompson’s illegal activities,” said Chuck Thies, manager for the Vince Gray 2014 campaign. “Mayor Gray has not been afforded the same presumption of innocence.”

The Center for Public Integrity reported last year that Thompson and other donors who listed his accounting firm as their employer gave at least $514,350 to federal candidates and political action committees since the 2002 campaign cycle. The biggest beneficiary of those funds was Mrs. Clinton, whose campaigns took in $50,400. Her presidential campaign committee received $40,300 from employees at Thompson’s firm in November 2007, when she attended a fundraiser at the company’s headquarters in the District.

Other recipients included Mr. Obama ($14,500 in the 2008 cycle), Democratic presidential candidate John F. Kerry ($20,000 in the 2004 cycle), presidential candidate John McCain ($13,800 in the 2008 cycle) and Sen. Harry Reid ($9,600 in 2009).

Thompson personally made political contributions totaling at least $215,000 in that period.

Craig Holman, a campaign finance specialist at the watchdog group Public Citizen in Washington, said shadow campaigns are becoming common with the expansion of political action committees.

“Of all the super PACs involved in the 2012 federal elections, 58 percent supported a single candidate — established and run by friends, family or former campaign staff of that single candidate. This is a shadow campaign,” he said.

Mr. Holman said courts have imposed a high barrier in defining which shadow campaigns are legal and which are not.

“As long as there is no traceable agreement between the candidate and the political operative — just a wink and a nod — the courts are reluctant to find coordination between the two,” he said.

Mr. Holman said the public should raise concerns about shadow campaigns, especially those backing every major recent presidential campaign, including Mrs. Clinton‘s.

“Hopefully, public disgust will grow against the artificial line drawn in the sand by the courts as to ‘legal’ versus ‘illegal’ shadow campaigns,” he said.

Listen to the little video by the reporter. She's unhappy that she had to report this Democrat corruption. She implies that had it not been for the Federal indictment it wouldn't have been reported. Sad.