Modified on: Tue, May 8, 2018 at 2:24 PM

This is a longer answer because we'd like to be as transparent as possible about how we got started and why this is the case.

To give some context, many of the founding members of Justice Democrats also helped start Brand New Congress in April of 2016. At that time, the goal was not just to endorse existing candidates who have campaigns. Our goal with Brand New Congress was to recruit candidates who were not thinking about running already and to actually fully run all of their campaigns as if it was one big presidential race. This was right after the Bernie campaign, so this was our thought for how to recreate that Bernie movement in a giant 400-candidate national race. This would let us have all kinds of efficiencies that come with a big national race and also, we believed, was one way we could create a national movement around taking over Congress. It would also, we believed, let us recruit different kinds of candidates who may not have had a lot of experience running campaigns but who believed in this big vision to change our country. Normally, running a campaign requires all kinds of ops and legal headaches, but we thought we could possibly short circuit that by having this big national campaign that all the candidates could plug into and one central team was doing the annoying work of keeping the actual campaign logistics running. That way each candidate would not have to become an expert in campaigns -- they would just need to be an expert in the policies and getting the message out. It was definitely a very new idea in the world of politics in the US (though anyone familiar with parliamentary politics in Europe would find this to be a very obvious idea as this is basically how new parties work there), and in hindsight was perhaps too ambitious, but we did believe it could be possible if we could unleash a movement similar in size to the one Bernie had just unleashed. Here's a video of us talking about this model on MSNBC from April of that year: https://www.youtube.com/watch?v=rvGtVu8gmtg

Legally, however, this was incredibly complicated. One thing we knew we needed to have was a Federal PAC (not a SuperPAC -- Federal PACs have a $5,000 donation limit, and we wanted to make sure that we had a cap on donations). This PAC would be necessary to do the work of policy development and candidate recruiting. So we created Brand New Congress as a PAC. But actually running the campaigns -- meaning doing direct work for campaigns -- is not something a PAC can do for a candidate for free. If a PAC did free work for a campaign, that would literally be the definition of dark money (technically, a PAC can 'in-kind' work like this, but we'd be capped at $5,000 worth of work). The FEC puts value on many kinds of campaign work (e.g. direct message consulting, writing press statements, any field work or voter outreach work, etc.). So, we knew that in addition to a PAC to recruit and train candidates, we needed some mechanism to charge the campaigns for the work we'd be doing for them as cheaply as possible while doing it all legally and according to FEC rules.

We originally thought that we could set ourselves up similar to PCCC (boldprogressives.org). They do something similar, where the PAC is set up to do activities like training and recruiting candidates, and then they provide some campaign services for a fee to candidates. However, when we talked to our lawyer, he explained to us that this kind of 'fee-for-service' work has to be a small percentage of a PAC's total work. With BNC, our plan was to essentially run the full campaigns for the vast majority of our candidates, so we were advised that this would definitely be too much fee-for-service work for a Federal PAC to do and still maintain its status as a Federal PAC. The ONLY way to do work for multiple candidates legally at this scale is to create an LLC and act as a vendor.

For that reason, we created Brand New Congress, LLC. To keep things simple, we put all our staff in that LLC and had it act as the vendor for both the PAC and all the candidates. We had in our operating agreement that the goal of the LLC was not to make a profit, and as such, we made our prices as low as possible while still satisfying the FEC's requirement that we are charging something reasonable because, again, if we weren't we would essentially be doing heavily discounted work for candidates and that is illegal and immoral since fighting dark money is literally what we want to do. To try to make this as clean as possible, we not only had the language in our operating agreement about the LLC's purpose, but we also made sure that Saikat Chakrabarti was the only controlling member of the LLC, and that he took no salary (either from the LLC, from Justice Democrats, or from Brand New Congress the PAC). Saikat is lucky to have a small side business that generates him enough income that he is able to do all of this work as a volunteer.

Fast forward to January. Cenk Uygur and Kyle Kulinski approached us with the idea of starting Justice Democrats. We decided to partner up, so Saikat was a co-founder of Justice Democrats and we decided to keep the same structure because with JD, at that stage, we still wanted to recruit non-traditional candidates and give them the infrastructure to run their campaigns. The first 10 campaigns we launched in April had this setup -- at that stage we were not sure we'd be able to get to a big national campaign, but we realized that with our LLC structure we had two big advantages: 1) we were able to get a campaign going from 0 to 60 in a very short period of time and extremely cheaply and 2) we were able to keep DCCC consultants from taking over the campaigns. Our experience with campaigns at this stage has taught us that the DCCC consultants are a big part of the problem -- they push candidates to move away from progressive ideas as the strategy to 'win' and we all know how well that's worked for Democrats. Of course, there are good progressive campaign workers out there too, and so we began to make it our job to try to get as many campaigns as possible to start hiring these progressive workers.

Fast forward to today. JD has moved away from the model of fully running campaigns from the bottom-up and has now backed a number of candidates whose campaign teams are at various stages of formation. We moved to this model for a few reasons: 1) An unprecedented number of progressives began running for office on their own so it started to make sense for us to back those candidates instead of trying to continue putting lots of effort into recruiting new candidates and running their full campaigns, 2) A lot of great progressive campaign workers who came out of the Bernie movement have continued working on campaigns, and 3) We did not ignite a movement as big as the Bernie Sanders presidential campaign, so our all-in-one model for running these candidates as a big national race no longer made sense.

We still have a number of campaigns where we are doing most of the work, but we also have a number that have a large campaign team doing their work for them and where we help in other ways like providing organizing support or connecting their campaign workers with our supporters. This mix of candidates is something that started to become the case at around August of 2017 as tons of new progressives began running for office, so we made the decision in September of 2017 to move all our staff from the LLC onto Justice Democrats PAC and have moved to a aforementioned 'fee-for-service' model in which we charge for services at-cost because it is no longer a majority of the PAC's business (since the majority of our campaigns don't need to rely fully on us for their work). This is the reason that when you look at the FEC reports for Justice Democrats from 2017, you will see large expenditures to Brand New Congress, LLC because the entire staff of Justice Democrats was working within that LLC.

TLDR: Justice Democrats started off running full campaigns for candidates and the only way to do that legally is with a vendor. Therefore, since the entire staff of JD was within that vendor, there are large expenditures to Brand New Congress, LLC in 2017. We've since moved to a mix of candidates and therefore are able to do this work through a fee-for-service model through Justice Democrats PAC. All JD staff now work directly for JD and their salaries are published in our latest FEC reports.